Luno is proud to have been one of the first cryptocurrency platforms to receive regulatory approval from The Securities Commission (SC) of Malaysia, giving their residents the ability to buy, sell and store cryptocurrencies such as Bitcoin and Ethereum safely and securely through a fully regulated provider.
We're committed to working closely with financial authorities and regulators to provide a framework for cryptocurrencies and digital assets, which we believe will have an important role to play in the future for finance. Regulation will ultimately bring clarity and protection to consumers, and will ensure that all cryptocurrency businesses have adequate standards in place to protect investors and their funds.
Luno CEO Marcus Swanepoel praised the SC’s decision and explained that it was an important step in the ongoing evolution of global finance services being driven by the adoption and use of cryptocurrencies. He says that change doesn’t come overnight, but “regulators like the Securities Commission in Malaysia, who work with new digital assets and blockchain technology are showing real leadership in the sector.
“They are opening up the way for investors, traders and individuals in the country to maximise the benefits of a new financial system.
“Malaysia has always been at the forefront of cryptocurrency adoption and knows the importance of digital assets in today’s global economy. By working with our clients we aim to make sure they can safely buy, sell and store Bitcoin and Ethereum, as well as future digital assets that are approved by the SC.”
Why we believe in regulation
Regulations help to protect your cryptocurrencies by lifting standards in the industry and implementing barriers to entry for operators with low concern (or capabilities) for consumer protection. An effective regulatory regime typically imposes obligations that promote the protection of customer funds and the crypto ecosystem more broadly. As such, the existence of a license to operate or other regulatory standing should provide customers with a good indication that a company can be trusted with their funds, and that they will have controls in place to prevent use of cryptocurrency for illicit means.
Such trust is vital for any company that deals with your finances, but particularly in crypto as it’s still not widely understood. There remains a widespread misapprehension that Bitcoin is only used for ‘bad’ or criminal purposes, and this unfairly tarnishes the entire industry.
For cryptocurrency platforms, regulation is also important because it lays the groundwork to develop the relationships critical to success. Key among these relationships are those with banking institutions.
What does effective regulation look like?
While regulation is necessary, it’s also important that it’s designed and implemented effectively. Regulators don’t have an easy task. They have to get to grips with a new technology that very few yet understand. They’re also working with limited evidence of cryptocurrency’s impact on society and any unintended consequences that may arise from widespread use – or, indeed, from their regulations. And they must do all of this without stifling innovation, carefully weighing the need to protect consumers with the benefits of a new technology with huge potential.
Effective regulation requires a collaborative and phased approach, with regulators acknowledging the benefits of gathering learning and working alongside industry. Luno worked closely with the SC to help it better understand the cryptocurrency industry as it went through the regulatory process and the result is a progress regulatory regime.
What does the future of crypto regulation hold?
It’s our mission to bring the world into a new financial future. We are building the bridge between what we have today and a future, frictionless financial system where it’s safer, cheaper, faster and more secure to transact and move money around. But, for now, we're in a hybrid economy where we still heavily rely on existing financial infrastructure to make the move to a future system easier.
Cryptocurrencies are maturing from a self-regulated domain to a regulated one, where individuals and businesses can introduce aspects of crypto assets into their daily lives, with investments and payments. For Luno it’s not about entering markets and making money quickly, but helping to build and establish a proper regulatory framework and fundamentally, upgrade the world to be a better financial system. We will therefore always adhere to the changing laws in any country that we operate and will continue to work with regulators around the world.
Regulation is inevitable. It’s also necessary. Our firm belief is that regulation will raise the bar in the cryptocurrency industry and, in our experience, this is also what customers want.