17th JANUARY 2019

Dear Stakeholders/partners/users,

On 14th January 2019, Malaysia’s Finance Minister, Lim Guan Eng said in a statement that The Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 (hereinafter will be referred to as “CMSDC Order 2019”) will come into force today (15th January 2019).

Under CMSDC Order 2019, digital currencies and digital tokens (collectively known as “digital assets”) will be prescribed as securities and would be regulated by the Malaysia’s Securities Commission (SC) and that the offering of these digital assets, as well as its associated activities, will require authorization from the SC and the need to comply with the relevant securities laws and regulations.

It was expressed that the SC will put in place the relevant regulatory requirements for the issuance of initial coin offerings (ICOs) and the trading of digital assets at digital asset exchanges in Malaysia, expected to be launched by end-Q1 2019. It was further expressed that any person offering an ICO or operating a digital asset exchange without SC’s approval may be punished, on conviction, with imprisonment not exceeding 10 years and fine not exceeding RM10 million.

The company is very pleased to inform that we will continuously and closely monitor any further announcements made by the Malaysia’s Ministry of Finance and Securities Commission with regards to the SMSDC Order 2019 and the regulatory requirements as our partner in Malaysia, BCMY (M) Sdn. Bhd., is currently endorsed as one of the registered Reporting Institution under the Central Bank of Malaysia for digital currencies business. – http://www.bnm.gov.my/index.php?ch=135&pg=542&ac=12&bb=attachment . Due to this partnerships and collaborations within this two (2) countries for business operations, we really hope we could meet the requirements set by each of the countries penetrated for this Blockchain and Crypto Currencies / Digital Assets / Crypto Token nature of business.

However, we have to clarify that DDK Platform and DDKoin falls under the jurisdiction of Republic of Singapore as it is operated under Swap Chain Pte Ltd, a company registered under Singapore’s Accounting and Corporate Regulatory Authority (ACRA), therefore the DDK Platform and DDKoin will not be subjected to the CMSDC Order 2019 and or the regulatory framework soon to be announced by SC.

Please refer to the Legal Opinion on DDKoin, issued by LAW&TRUST International (London)  at https://ddkoin.com/documentation/legal-opinion.pdf. This Legal Opinion evaluated specifically as to whether DDKoin can be considered as “securities” under Singapore’s Securities and Futures Act 2001 (SFA).

They concluded that DDKoin does not and shall not be considered as a “securities” under the purview of Section 2 of the SFA on the following basis:-

  1. DDKoin cannot be considered as unit in CIS (Collective Investment Scheme);
  2. DDKoin cannot be evaluated as Capital Market Products; and
  3. DDKoin has low chances to fall under definition of “securities” as defined under Section 2 of the SFA.

We however would like to emphasize that we will continuously work hand in hand with our partner to ensure that our company’s values and business is always align with all applicable respective governmental laws, regulations and orders, in order to protect and safeguard the best interests of our company, partners and users.

We are very happy to offer our assistance to the respective governmental authorities in assisting them with the necessary ideas, feedbacks or documentations, should they require our contributions in the same to ensure that the business of digital currency and digital assets is well regulated, keeping in mind that as Lim Guan Eng asserted, digital assets has a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and deems it as an alternate asset class for investors.

Nevertheless, we would like to take this opportunity to remind users to exercise the necessary caution and to understand the risks associated with digital currencies digital assets at all times.  

Please find attached, a copy of the statement and SC media statement release for your reference.

Yours truthfully,

DDK Management

Risk Managament, Legal and Compliance Department

 

Categories: Announcements

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