Complete guide to buying Crypto in Malaysia: a 2024 guide

Crypto. Bitcoin. Magic internet money. One or more of these terms have probably crossed your radar by now. Or you might have even seen your friends post indiscernible graphs of their crypto gains and losses on Instagram. Crypto has been all the hype lately, and you may be wondering how to get your hands on it.

Historically, buying crypto in Malaysia has been difficult due to its fuzzy legal status. However, new processes introduced by the Malaysian government in 2018 have made it simpler than ever. If you’ve been thinking of jumping on the crypto bandwagon, here are some things you should know about how to buy crypto in Malaysia.

What Exactly is a Crypto

Cryptocurrencies are digital or virtual currencies that use cryptographic systems to secure transactions and control the creation of new units. These currencies enable secure online payments without relying on third-party intermediaries. The term "crypto" refers to the various encryption algorithms and cryptographic techniques that safeguard these transactions, including elliptical curve encryption, public-private key pairs, and hashing functions.

Central to the appeal and functionality of Bitcoin and other cryptocurrencies is blockchain technology. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across a network of computer systems. Each block in the chain contains a number of transactions, and every new block generated must be verified by all the nodes (computers) in the network before it is added to the chain. This decentralized process ensures the integrity and security of the data, making it nearly impossible to alter transaction histories.

Blockchain technology is not limited to cryptocurrencies. Experts believe it has the potential to revolutionize multiple industries, including supply chains, online voting, and crowdfunding. Financial institutions, such as JPMorgan Chase & Co., are already utilizing blockchain to reduce transaction costs by streamlining payment processing.

Types of Cryptocurrency

There are thousands of cryptocurrencies available today, each with its unique features and purposes. Understanding the different types of cryptocurrencies can help you make informed decisions about which ones to invest in. Here are some of the main types:

1. Utility Tokens

Utility tokens are designed to be used for a specific function within a blockchain ecosystem. For instance, Ethereum's ether (ETH) is used to pay for transaction fees and computational services on the Ethereum network. Similarly, XRP is used on the XRP Ledger to facilitate cross-border payments for financial institutions.

Examples:

• Ethereum (ETH): Used for validating transactions and running applications on the Ethereum blockchain.
• XRP: Facilitates fast and low-cost international money transfers.

2. Transactional Tokens

These tokens are intended to be used as a medium of exchange, similar to traditional currencies. Bitcoin, the first and most well-known cryptocurrency, falls into this category. It was created to serve as a decentralized digital currency, enabling peer-to-peer transactions without the need for intermediaries like banks.

Examples:

• Bitcoin (BTC): The original cryptocurrency, designed as a digital alternative to fiat money.

3. Governance Tokens

Governance tokens grant holders the right to participate in the decision-making processes of a blockchain project. Holders can vote on key issues such as protocol upgrades, development priorities, and other governance matters.

Examples:

• Uniswap (UNI): Used to vote on proposals and changes to the Uniswap protocol.

4. Platform Tokens

Platform tokens support decentralized applications (dApps) that run on their respective blockchains. These tokens can be used to pay for services or as fuel for transactions within the platform.

Examples:

• Solana (SOL): Powers applications and transactions on the Solana blockchain.

5. Security Tokens

Security tokens represent ownership of an asset, such as a share in a company or a real estate property. These tokens are subject to federal securities regulations and are typically used for investment purposes.

Examples:

• MS Token: Represents partial ownership of the Millennium Sapphire, a valuable gemstone.

Are Cryptocurrencies Legal in Malaysia?

In Malaysia, cryptocurrencies are not considered legal tender, meaning they are not recognized as an official form of payment. However, this does not imply that cryptocurrencies are illegal. There are no laws prohibiting the exchange of services or assets using cryptocurrencies in Malaysia. For example, while US Dollars are not legal tender in Malaysia, it is not illegal to use them if both parties involved in the transaction agree to it. The same principle applies to cryptocurrencies.

Selected cryptocurrencies are legal in Malaysia and are regulated by the Securities Commission Malaysia (SC) under the Digital Assets Guideline, issued on October 28, 2020. This regulation was a significant development for the crypto community in Malaysia, as it brought clarity and legitimacy to the use of digital assets.

Approved Cryptocurrency Exchanges

As of the time of writing, the Securities Commission Malaysia has approved SIX exchanges to operate in the country:

• Hata 
• Luno
• SINEGY
• Tokenize
• MX Global
• Torum

The approval process for these exchanges was rigorous, with over a dozen applicants failing to meet the stringent requirements set by the SC. The exchanges that were approved had to demonstrate their ability to adhere to strict regulatory standards, which included having an independent trustee to safeguard investors' funds.

The Importance of Regulation

Regulation plays a critical role in protecting investors and ensuring the integrity of the financial system. By using regulated exchanges, users can have greater confidence that their investments are secure and that the platform operates transparently. The SC's guidelines require exchanges to have robust security measures in place and to follow strict compliance protocols.

Cryptocurrencies You Can Buy in Malaysia

As of the time of writing, the Securities Commission Malaysia has approved the buying and selling of 14 cryptocurrencies. These approved cryptocurrencies can be legally traded on licensed exchanges within the country. Here is the list of the approved cryptocurrencies:

1. Bitcoin (BTC)
2. Ethereum (ETH)
3. Avalanche (AVAX)
4. Polygon (MATIC)
5. Bitcoin Cash (BCH)
6. Ripple (XRP)
7. Litecoin (LTC)
8. Solana (SOL)
9. Chainlink (LINK)
10. Uniswap (UNI)
11. Cardano (ADA)
12. Polkadot (DOT)
13. Cosmos (ATOM)
14. Worldcoin (WLD)

While these 14 cryptocurrencies are approved for trading on licensed exchanges in Malaysia, it's important to note that there are over 10,000 types of cryptocurrencies worldwide. Investors in Malaysia can still purchase other cryptocurrencies outside of the approved exchanges, but this comes with increased risks. Using unregulated platforms can expose investors to security vulnerabilities, lack of regulatory oversight, and potential legal issues. Therefore, it is crucial to exercise caution and thoroughly research any platform and cryptocurrency before making a purchase.

Places You Can Invest in Crypto

1. Licensed Cryptocurrency Exchanges

The legal way to buy cryptocurrencies in Malaysia is through a licensed Digital Asset Exchange (DAX). The Securities Commission (SC) requires these platforms by law to have an independent trustee to safeguard investor funds, ensuring a level of protection in case something goes wrong with the platform. As of now, only four exchanges are licensed and regulated by the SC. Here’s a detailed look at each of these exchanges, including their founding details, assets under management (AUM), and the cryptocurrencies they support.

#1. Luno

Founded and headquartered in London since 2013, Luno is a global cryptocurrency exchange that has quickly established itself as a leader in the industry. Known for its user-friendly interface and strong security measures, Luno allows users to buy and sell cryptocurrencies with ease and confidence. One of its key features is the ability to trade in Ringgit Malaysia, making it a popular choice among Malaysian investors.

Luno operates in several major cities around the world, reflecting its commitment to expanding its reach and services globally. In addition to its London headquarters, Luno also operates in South Africa, Malaysia, Indonesia, Nigeria, and Australia, where it continues to promote cryptocurrency adoption and education.

• Website: https://www.luno.com/en/my 
• Founded: 2013
• Supported Cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), Chainlink (LINK), Uniswap (UNI), Cardano (ADA), Solana (SOL), Polkadot (DOT), Cosmos (ATOM), Avalanche (AVAX), Polygon (MATIC).
• Deposit fees: free above RM 100
• Instant buy/sell fees: 2%
• Withdrawal fees: RM 0.10
• Maker fees: 0.25%
• Taker fees: 0.5%

#2. SINEGY

SINEGY, founded in 2017, is a prominent digital asset exchange based in Malaysia. The company is dedicated to providing a secure and efficient platform for trading cryptocurrencies, focusing on strong compliance with local regulations and user security. SINEGY has established itself as a reliable and trustworthy exchange, offering digital assets including Bitcoin (BTC) and Ethereum (ETH). With a commitment to innovation and customer service, SINEGY continues to enhance its platform to meet the evolving needs of cryptocurrency traders.

• Website: https://sinegy.com/
• Founded: 2017
• Supported Cryptocurrencies: Bitcoin (BTC), Ethereum (ETH)
• Deposit fees: Free
• Withdrawal fees: RM 0.10
• Maker fees: 0.25%
• Taker fees: 0.5%

#3. Tokenize

Founded in 2017, Tokenize is a leading digital asset exchange with operations in key Asian markets, including Singapore, Malaysia, and Vietnam. The platform caters to both individual and institutional investors, offering a secure and user-friendly environment for trading cryptocurrencies.

Tokenize Malaysia, incorporated in 2018 as Tokenize Technology (M) Sdn Bhd, is a Recognized Market Operator (RMO) regulated by the Securities Commission of Malaysia. This status allows Tokenize to operate a Digital Asset Exchange (DAX) in the country. The exchange gained significant attention when Kenanga Investment Bank acquired a 19% stake in its Malaysian operations, underscoring its growing influence and trust within the financial community.

• Website: https://tokenizemalaysia.com/
• Founded: 2018
• Supported Cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), Uniswap (UNI), Solana (SOL)
• Deposit fees: Free
• Withdrawal fees: Free (fiat)
• Maker fees: 0.1%
• Taker fees: 0.8%

#4. MX Global

Founded in 2018, MX Global Sdn. Bhd. is a fintech company based in Kuala Lumpur, dedicated to creating a secure and accessible cryptocurrency trading platform. The MX Exchange supports trading in Bitcoin and Ethereum, providing end-to-end solutions for storing, buying, and selling cryptocurrencies. MX Global's platform integrates robust cyber-security controls and compliance management systems. Additionally, the company collaborates with leading advisory and legal firms to ensure best practices in compliance, business operations, and risk management, aiming to be the preferred liquidity platform for cryptocurrency investors and token issuers.

• Website: https://mxglobal.com.my/ 
• Founded: 2018
• Supported Cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Solana (SOL)
• Deposit fees: Free
• Withdrawal fees: RM 0.10
• Maker fees: 0%
• Taker fees: 0.5%

#5. Hata

Hata, launched in 2022, is Malaysia's newer cryptocurrency exchange, and also the 5th regulated Digital Asset Exchange (DAX) after receiving Approval-in-Principle from the Securities Commission (SC) in November 2022. As the first platform approved as a Digital Broker, Hata can seek liquidity from other regulated exchanges, enhancing its market reach. Hata enables businesses and consumers to transact cryptocurrencies with fiat currencies like the US Dollar and Malaysian Ringgit safely. Regulated by the SC and the Labuan Financial Services Authority, Hata is committed to providing secure and accessible cryptocurrency trading.

• Website: https://hata.io/home
• Founded: 2022
• Supported Cryptocurrencies (MYR Market): Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), Chainlink (LINK), Uniswap (UNI), Cardano (ADA), Solana (SOL), Avalanche (AVAX), Polygon (MATIC).
• Supported Cryptocurrencies (USD Market): 37 cryptocurrencies
• Deposit fees: Free
• Instant buy/sell fees: 1%
• Withdrawal fees: RM 0.50
• Maker fees: 0%
• Taker fees: 0.1% - 0.4%

#6. Torum

Torum International has emerged as a significant player in Malaysia's cryptocurrency landscape, becoming the sixth digital asset exchange (DAX) to receive an approval-in-principle from the Securities Commission Malaysia (SC) to operate as a Recognised Market Operator (RMO). Additionally, Torum has been approved to function as a digital broker, enabling it to access liquidity from other exchanges for fairer market prices. As a subsidiary of Torum Technology, a "SocialFi Metaverse ecosystem" established in 2018, Torum aims to simplify crypto trading and foster adoption in Malaysia, backed by support from major industry players like KuCoin Labs and Huobi Ventures.

• Founded: 2020
• Digital Asset Exchange Platform not launched yet

2. Peer-to-Peer Marketplace

Another way to buy and sell crypto in Malaysia is through a peer-to-peer marketplace (P2P). Instead of going through an exchange platform, you can sell it directly to another individual. Sellers will post what they have for sale, how much they want it for, and acceptable payment methods.

3. Bitcoin ATM

Bitcoin ATMs provide a convenient and quick option for purchasing cryptocurrencies in Malaysia. These machines allow users to buy Bitcoin using cash or a debit card, enabling transactions without the need for a traditional exchange account or extensive verification processes. The typical procedure involves scanning your wallet's QR code and depositing cash, with the Bitcoin being transferred to your wallet instantly.

However, as of the time of writing, there are no Bitcoin ATMs available in Malaysia. This lack of availability highlights the importance of using regulated exchanges for purchasing and trading cryptocurrencies within the country​.

Despite the absence of Bitcoin ATMs, Malaysian users can still engage in cryptocurrency transactions through licensed Digital Asset Exchanges (DAX) such as Luno, SINEGY, Tokenize, and others. These platforms provide secure and compliant environments for buying, selling, and storing cryptocurrencies.

Things to Consider Before Buying Crypto

Fees

Purchasing crypto through any platform incurs fees that will add up over time. There are three ways to fund your exchange:

• Bank transfer: Typically the cheapest but takes a few days.
• Credit cards: Fast but expensive due to high fees.
• Debit cards: Reasonable fees and near-instant deposits.

Irreversible Transactions

Cryptocurrencies like Bitcoin have irreversible transactions to protect against fraud and double-spending. This means if you type in the wrong recipient address or overpay, it can never be undone. Therefore, always double-check the amount you're sending, as well as the receiver and sender address to avoid an irreversible mistake.

Security Measures

Security is paramount when dealing with cryptocurrencies. Use platforms with strong security protocols such as two-factor authentication (2FA) and cold storage options. Ensure your wallet has strong security features and keep your private keys safe. Avoid sharing your private keys or recovery phrases with anyone.

Regulatory Compliance

Choose platforms that comply with local regulations. Licensed exchanges are more likely to offer better security and customer protection. In Malaysia, for example, look for exchanges regulated by the Securities Commission Malaysia.

Market Volatility

Cryptocurrencies are known for their volatility. Prices can fluctuate wildly in short periods, so be prepared for significant changes in the value of your investments. Understand the risks associated with this volatility and never invest more than you can afford to lose.

Transaction Speed

Different cryptocurrencies and platforms have varying transaction speeds. While some transactions can be completed in minutes, others might take hours or even days, depending on network congestion and other factors. Research the typical transaction times for the cryptocurrency you plan to invest in.

Liquidity

Liquidity refers to how easily you can buy or sell a cryptocurrency without affecting its price. Higher liquidity generally means lower price volatility and faster transaction times. Choose well-established cryptocurrencies and platforms that offer high liquidity.

Community and Support

A strong community and good customer support can be invaluable, especially for beginners. Look for platforms with active user communities and responsive customer support teams. Engaging with a community can provide insights and help you stay informed about the latest trends and potential risks.

Storage Options

Consider how you will store your cryptocurrencies. While exchanges offer convenient storage solutions, they are also targets for hackers. Hardware wallets provide a more secure option as they store your private keys offline. Diversify your storage methods to minimize risk.

Research and Due Diligence

Before investing in any cryptocurrency, conduct thorough research. Read whitepapers, understand the project’s goals, and verify the team’s credentials. Look for independent reviews and analyses to gain a comprehensive understanding of the investment.

By keeping these factors in mind, you can make more informed decisions and navigate the cryptocurrency market with greater confidence. Always stay updated on the latest developments and continue educating yourself to protect your investments.

Tips to Stay Vigilant in the Crypto Market

Investing in cryptocurrency can be rewarding, but it also comes with significant risks. Since 2019, Malaysians have lost almost RM400 million to cryptocurrency investment scams. Here are some essential tips to help you navigate the crypto market safely and avoid falling victim to scams.

Tips #1: Verify the Platform

Always ensure that you're using a legitimate platform for buying and selling cryptocurrencies. Look for secure HTTPS connections, verify the correct URLs, and check for authentic social media profiles. Scammers often create fake websites and social media accounts to deceive investors. Double-checking these details can help protect you from fraudulent schemes​ 

Tips #2: Use Licensed Exchanges

It's crucial to buy crypto from licensed exchanges. While it might be tempting to use peer-to-peer (P2P) platforms like Remitano and LocalBitcoin to save on fees, these can be rife with scammers. Direct dealings can be dangerous and may lead to significant losses. Licensed exchanges offer better security and regulatory compliance, making them a safer choice​.

Tips #3: Diversify Your Holdings

Don't keep all your cryptocurrencies in one place. Distribute your assets across multiple wallets to mitigate risks. Use cold storage methods like hardware wallets (e.g., Ledger Nano) to keep your private keys secure. Always enable two-factor authentication (2FA) to add an extra layer of security. This way, even if one of your wallets gets compromised, your other holdings remain safe​.

Tips #4: Join a Community

Engage with local crypto communities for support and information. Groups like Bitcoin Malaysia #1 offer discussions, free webinars, and events where you can learn from experienced users. Staying updated on the latest scam tactics and sharing knowledge with others can help you stay safe​.

Tips #5: Be Wary of High-Pressure Tactics

Scammers often use high-pressure tactics to get you to invest quickly, promising bonuses or discounts for immediate action. Take your time to research and understand any investment opportunity before committing your funds. High returns with little to no risk are a common red flag for scams​​.

Tips #6: Protect Your Wallet

Ensure your cryptocurrency wallet is secure. Never share your private keys with anyone. Use wallets with strong security features and keep your software updated. If you notice any suspicious activity, stop using the wallet immediately and report it​.

Tips #7: Be Cautious with Social Media

Crypto scams are prevalent on social media. Be skeptical of investment opportunities promoted on these platforms, especially those promising high returns or free giveaways. Verify the legitimacy of the offers and avoid sharing personal information with unknown sources.

Tips #8: Research Thoroughly

Before investing in any cryptocurrency, do thorough research. Check for whitepapers, understand the project's goals, and verify the credibility of the team behind it. Look for genuine reviews and testimonials to ensure the legitimacy of the project.​.

Staying vigilant in the crypto market requires constant attention and caution. By following these tips, you can better protect your investments and navigate the complex world of cryptocurrency safely.

Investing in Cryptocurrency in Malaysia

Buying crypto in Malaysia has become relatively straightforward with numerous platforms now available for trading. However, cryptocurrency remains a new and volatile asset class. It's crucial to conduct thorough research and approach investments with caution to manage the high risks involved. Always use regulated exchanges and stay informed to protect your investments and navigate the market wisely.