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Cease and Desist! Malaysia’s Securities Watchdog Puts Brakes on ICO

Last Updated March 4, 2021 5:03 PM
Samburaj Das
Last Updated March 4, 2021 5:03 PM

Malaysia’s statutory securities regulator and watchdog has issued a cease an immediate cease and desist to a startup’s initial coin offering (ICO).

With a statement on Tuesday, the Securities Commission (SC) Malaysia ordered the CopyCash Foundation to “immediately cease and desist all its proposed activities including a purported plan to launch an Initial Coin Offering (ICO)”. CopyCash describes itself as a decentralized social travestying (trading and investing) blockchain platform on its website , enabling travestying in foreign exchange markets and cryptocurrencies.

The directive came ahead of the intended launch of the startup’s ICO today.

The ban follows a previous statement by the regulator on January 5 when the authority stated it “will be calling in key officers” from CopyCash to “inquire into its activities including the purported launch of CopyCashCoin (CCC).” The regulator also noted that it had seen an increase in ICOs “soliciting investments in cryptocurrencies from the public at large, including senior citizens.”

After the inquiry, the SC wrote in its statement yesterday:

“The [cease and desist] directive was issued by the SC following its inquiry after it found that there is a reasonable likelihood that disclosures in CopyCash Foundation’s white paper and representations to potential investors will contravene relevant requirements under securities laws.”

The securities regulator’s swift action notably follows a public notice cautioning the public over ICO-related investments, in September 2017. The authority urged investors to “fully understand” what’s on offer with a digital token sale, adding ICO operators could include disclaimers that would absolve them from “certain responsibilities and obligations.”

In its statement last week, the Securities Commission confirmed it will continue to put a spotlight on ICO activities in Malaysia alongside the country’s central bank.

“The SC continues to work with Bank Negara Malaysia and other enforcement agencies, including our foreign counterparts, to closely monitor such activities and will take appropriate action where necessary,” the watchdog stated.

Featured image from Shutterstock.