SC: 996 Complaints Regarding Unregistered Dax Operators Since 2019

KUALA LUMPUR, March 20 (Bernama) -- The Securities Commission Malaysia (SC) has received a total of 996 complaints and inquiries regarding unregistered digital asset exchange (DAX) operators.

This follows the enforcement of the Capital Markets and Services (Prescribed Securities) (Digital Currency and Digital Token) Order 2019 (Prescribed Order) on Jan 15, 2019, according to the SC in its Annual Report 2024 released today.

The complaints involve financial losses or disputes from investors who invested through unregistered DAX operators.

The SC highlighted that most of these operators targeting Malaysian citizens were unresponsive to emails or phone calls made by the complainants seeking clarification.

Therefore, the SC emphasised that Malaysians investing with these operators may not have the necessary protection or assistance in the event of a dispute.

"There are DAX operators that may be licensed or regulated by foreign regulators but have been found to offer their services to Malaysian investors. There are cases where the DAX platform is entirely fake, with no actual trading activity taking place," said the SC.

The SC also said that investors were deceived into believing they were participating in legitimate trading, while their funds were misappropriated by fraudsters.

These platforms typically do not provide information about their locations or any support from legitimate companies, placing them outside the SC’s regulatory reach and making it difficult to track them, the SC added.

Therefore, the SC said that it is using a multi-pronged approach to address these concerns, including enforcement actions, investor alerts, blocking of websites with the help of the Malaysian Communications and Multimedia Commission, suspension and termination orders, and investor education initiatives.

It said that to date, enforcement action has been taken against four illegal DAX operators over the years, with the latest action in November 2024 against ByBit Technology Ltd.

"DAX operators are among the largest in terms of trading volume and have a significant global presence, but have been found to target Malaysian investors.

"The decision to initiate enforcement action is always based on the availability of evidence, the intended outcome, and whether there are alternative methods that could be used to achieve the same result," it added. 

-- BERNAMA