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Financial Institutions

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Given the increasing reliance of Financial Institutions (FIs) on technology and online systems and the increasing threat of cyber attacks, it is timely that the Bank Negara Malaysia (BNM) issued, on 4 September 2018, a set of minimum standards on technology risk and cybersecurity management by FIs in Malaysia – the Risk Management in Technology policy document (RMiT). The RMiT has been issued as an exposure draft which it is intended will come into force on…

Bank Negara Malaysia (BNM) issued the policy document on Anti-Money Laundering and Counter Financing of Terrorism for Digital Currencies (Policy Document). The Policy Document was issued on 27 February 2018 following a public consultation process in 2017.Overview of the Policy DocumentUnder the Malaysian Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA), a “reporting institution” (RI) includes any person who provides services of exchanging digital currency for money (and vice versa) or…

Japanese cryptocurrency exchange CoinCheck confirmed on 26 January 2018 that it has been the victim of a massive hack, resulting in what would appear to be the largest cryptocoin theft of all time. In a press conference CoinCheck admitted that the current understanding was that the hackers had stolen around 523 million of the exchange’s NEM coins which, at the time of detection, were worth around $534 million. This would surpass the $400 million worth of…

On 7 December 2017, Bank Negara Malaysia (ie, the Central Bank of Malaysia) (BNM) issued an exposure draft of the Interoperable Credit Transfer Framework (Exposure Draft) to invite public and industry feedback on the proposed introduction of interoperable credit transfer services that leverage on a shared payment infrastructure in Malaysia. The Exposure Draft is part of BNM’s continuous efforts to migrate the nation towards the use of electronic payments. Through the proposed Interoperable Credit Transfer Framework…

Globally, there is an emergence of initial coin (or token) offerings (“ICOs”) as a source of funding for startups and technology companies latching onto the digital token trends. The Singapore Business Times reported that based on information obtained from Tokendata.io, there were 34 ICO projects raising USD 665 million in July 2017 alone. Singapore has also seen its fair share of ICOs and digital tokens offering, ranging from property backed tokens to crowdfunding platforms for…

Blockchain technology has the potential to revolutionize how financial institutions record, process, report and verify financial transactions. Many large financial institutions have already begun to invest in the technology. As momentum behind blockchain continues to grow, new services applying or leveraging the blockchain information will proliferate. Laws will need to address the various financial activities that will be shifted to blockchain technology.Blockchain employs distributed ledger technology. Nodes across the blockchain network apply every transaction to…