PETALING JAYA: Country Heights Holdings Bhd’s (CHHB) plan to conduct an initial coin offering (ICO) to issue its own cryptocurrency, called “horse currency”, has hit a speed bump.
The Securities Commission (SC) has ordered all ongoing ICOs to halt their activities and return all monies or digital assets collected from investors.
The regulator issued the warning to the ICOs after the rules on cryptocurrenices and digital tokens came into effect on Monday.
The SC said it had received numerous queries on the implementation of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019.
“With regard to ICOs, no person shall conduct an ICO without the prior authorisation of the SC,” the capital market regulator said.
The SC said the guidelines for ICOs would only be issued by the end of March.
“In the meantime, ongoing ICOs should cease all activities and return all monies or digital assets collected from investors,” it said.
CHHB founder and chairman Tan Sri Lee Kim Yew had said that his company would like to be the first to launch cryptocurrency in the country when the regulations were ready.
The company’s plan was to eventually issue one billion horse currencies backed by RM2bil worth of physical assets held by the holding company, with an initial 300 million open to the public for circulation.
The SC said it had invited and engaged with existing digital asset platform operators. “Arrangements have been put in place to facilitate the operations of these platforms for a transitional period until March 1, 2019, subject to them fulfilling the conditions specified by the SC.
“During this period, these platform operators would not be permitted to accept new investors and will only be allowed to facilitate the withdrawal or transfer of client assets with the written instruction of the investor,” the SC said.
Existing platform operators who failed to or did not attend the engagement with the SC yesterday have been advised to contact the SC immediately, and not later than Jan 25, failing which they would be deemed to be operating a market in breach of the securities laws, the commission said.
“Once the relevant guidelines have been issued, existing platform operators would be required to apply to the SC for authorisation if they intend to operate beyond the transitional period.
“Prospective operators can also apply to the SC for authorisation once the guidelines are issued. The SC will evaluate all applications and will only authorise market operators that fulfil the relevant requirements,” it added.
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