Malaysia Bans Atomic Wallet for Operating Without Registration

By Philip Maina

13 hours agoWed Dec 25 2024 08:00:23

Reading Time: 2 minutes

• Malaysia has prohibited Atomic Wallet from operating in the country
• The country holds that the wallet isn’t registered to operate a digital asset exchange
• Atomic Wallet is among other crypto-focussed entities that have also been barred from operating in the country

The Malaysian Securities Commission (SC) has prohibited Atomic Wallet from operating in the country saying it’s operating without registration. The securities regulator said the wallet is illegally operating a digital asset exchange and attached links to the wallet’s page on Google Play Store and Apple’s App Store. Atomic Wallet isn’t the only crypto-focused platform on the regulator’s list of prohibited platforms with others listed for running an “illegal investment scheme,” an indication that Malaysia is committed to protecting its crypto users by forcing crypto operators to operate under the county’s financial laws.

SC Believes Some Platforms Are Scams 

The commission also listed other platforms like Autobot Crypto for “carrying on unlicensed capital market activities of dealing in securities.” The commission warned investors against dealing with platforms on the list saying that such investors aren’t protected under Malaysian securities laws. 

Other platforms on the list are accused of running scams, misusing the commission’s logo to attract users, and misusing the names and credentials of registered entities.

Last year, Atomic Wallet suffered a data breach that resulted in users cumulatively losing over $100 million. The hack was linked to North Korean hackers who later laundered the illicit funds through Garantex . 

Curbing Money Laundering Through Regulations

Affected users filed a class-action lawsuit seeking the wallet provider to compensate them. In September this year, a United States court dismissed the lawsuit saying that it lacked jurisdiction over Atomic Wallet which is registered in Estonia. 

The inclusion of Atomic Wallet on Malaysia’s “investor alert list,” comes as more countries seek to regulate crypto operators to protect their citizens and prevent money laundering and terrorism financing through crypto platforms.

With Atomic Wallet being among the top crypto wallet providers, it’s to be seen whether it’ll formally seek a Malaysian license.