GO BACK if you (1) don’t have at least
3 6 12 months’ worth of expenses in savings (where to save money), and (2) not good and not willing to learn about digital security. I’m dead serious, GO BACK. Cryptocurrencies as an investment is NOT suitable for you right now. You’re entering the high risk, high rewards zone.
Alright, full disclosure time – I am a crypto investor, since end of 2015. Why? Sure, there are people who buy cryptocurrencies for their utility, but let’s face it, most people get into it for the profit potential, including myself. The value is driven by supply and demand and while it has fundamentals rooted in decentralisation, many have dismissed it as speculative.
In case that isn’t clear, I’ll repeat: (1) I’m biased because I’m a crypto investor, and (2) cryptocurrencies can be seen as speculative for people who don’t value decentralisation as a feature.
Still here? Good, alright let’s move on from the disclaimers and get into the actual how-to. Please be aware that the information here is not meant as financial advice, please please do your own research. In fact I insist on it – if you’re someone who’s lazy to do research, sooner or later you’ll be eaten alive.
The first thing you should know, IMO, is despite having ‘currencies’ in its name, cryptocurrencies are mostly not used as money, in the strictest sense of the word. For example:
- Bitcoin – Except in specific situations (donating, surviving in a dictatorship regime, country has very high inflation, etc), most people don’t use it as currency or for making payments. Rather, it’s treated as digital asset, a store of value
- Other cryptocurrencies – there are thousands of them. They could be utility tokens for tech platforms, payment network, gaming, ‘bitcoin 2.0’, scams, jokes, basically it can be 1001 things because the underlying technology (blockchain) can be applied in so many ways
I have divided this guide into the following sections:
- Are cryptocurrencies legal in Malaysia
- 5 Cryptocurrencies you can get in Malaysia
- How to buy cryptocurrencies in Malaysia – List of Licenced Exchanges
- What other cryptocurrencies should I get (and how)?
- 5 Rules to not get scammed when you invest in cryptocurrencies in Malaysia
- [Muslim corner] Is cryptocurrency halal? How to calculate zakat on cryptocurrency?
- Can cryptocurrency be converted to cash
- Are gains from cryptocurrency taxable in Malaysia
- Why are there two bitcoins
- (New) Making money with cryptocurrencies and DeFi
#1 – Are cryptocurrencies legal in Malaysia?
Yes, selected cryptocurrencies are legal in Malaysia. Securities Commission Malaysia regulates them under the Digital Assets Guideline, issued on 28 October 2020. As of time of writing, three exchanges are approved to sell cryptocurrencies in Malaysia: Luno, SINEGY and Tokenize.
I can’t stress how much regulation of crypto exchangers in Malaysia was a big deal to the community – I heard over a dozen exchangers applied for the licence to operate but couldn’t meet SC’s stringent requirements, and the negotiation process itself took years so only the most
stubborn persistent survived.
Before you ask, no, Binance is not licensed to operate in Malaysia. Why? I don’t know why, they just didn’t bother to go through the application processes. So I would say to everyone – you want to use the unregulated exchanges, sure. Just be aware of the risks.
#2 – 5 Cryptocurrencies You Can Get in Malaysia
As of time of writing, Securities Commissions have approved the buying and selling of 5 types of cryptocurrencies in Malaysia:
- Bitcoin (BTC) – the OG crypto. The one you heard about the most, and the one that started it all
- Ethereum (ETH) – ‘Programmable money’. People interested in DeFi – Decentralised Finance – should check out this one.
- Litecoin (LTC) – kinda like budget version of bitcoin (oop I said it). They say that if bitcoin is digital gold, then litecoin is digital silver
- Ripple (XRP) – Ripple is actually a private and CENTRALISED company, which means crypto purists hate it. Holding XRP is kinda sorta like holding stocks in a remittance service provider
- Bitcoin Cash (BCH) – A fork of Bitcoin. See Section #9 – Why are there two bitcoins
Which of the above to get? Personally, I think Bitcoin and Ethereum are excellent as starting point as they have the longest history and good reputation. Not financial advice, do your own research.
Can you get other cryptocurrencies? Can. See #4.
#3 – How to Buy Cryptocurrencies in Malaysia – List of Approved Exchanges
As of time of writing, Securities Commissions have approved 3 exchanges to open shop in Malaysia: Luno, SINEGY and Tokenize. Account opening is easy: Go to the websites, register, complete KYC (know-your-customer process), transfer money and buy any of the 5 cryptocurrencies offered.
Here are all three platforms and how the interface looks like.
Of the three options, I’ve used Luno the longest, and had good experience. I may have made my first bitcoin from them too!
[Obligatory referral code: Buy RM500, get RM50 in BTC (instant 10% ROI) with my code ‘LNSURAYA50′ (valid for new users only).
Steps: Open a new account at Luno.com > Go to REWARDS > Choose ENTER CODE > Enter the given promo code > Click Apply Code > Deposit the minimum amount required > Buy the minimum transaction amount > Get rewarded with the additional Bitcoin.]
SINEGY is Malaysia’s homegrown exchange!
Obligatory referral code: Click here to get 15 Tokenize Points when you sign up with my link. The points are exchangeable for digital assets offered in Tokenize.
#4 – What other cryptocurrencies should I get (and how)?
If you’re new to the world of cryptocurrencies, then I suggest you stick to the 5 approved cryptocurrencies in Malaysia first. As you learn more and gain more experience, then maybe you can branch out to other cryptocurrencies. You can see explore other cryptocurrencies on websites like CoinGecko and CoinMarketCap.
Getting other cryptocurrencies is pretty easy:
- Get BTC/ETH from any of the 3 licensed exchange above
- Transfer to another exchange that offers the cryptocurrency you want. Make sure it’s reputable (*cough Binance is not bad cough*)
- Make the exchange. Whenever you’re stuck, remember to check the FAQ and Academy sections, everything is there
I’m not able to suggest or recommend any particular cryptocurrencies to get. I used to tell people to look at fundamentals and technology before deciding to ‘invest’ in a particular cryptocurrency. But sometimes, even the most promising projects fail – I’ve had tokens that lost 99% of their value and never recovered.
In crypto, you just don’t know what’s going to happen – I mean, no one predicted the Dogecoin phenomenon, the founder created it as a joke. But as I’m writing this, the market cap for Dogecoin is 41 BILLION dollars.
So, here’s the approach I suggest: Rather than using the gambling approach, go check out different cryptocurrencies and what they are used for because not all of them are for ‘store of value’. Some platforms use cryptocurrencies/tokens to interact in the platform so if you’re interested in the project, then it is not a bad idea to get the cryptocurrencies for learning purposes.
- Programmers interested to learn how to build DApps (Decentralised Apps) and code smart contracts can check out the Ethereum platform and ETH KL team
- Gamers interested in play-to-earn opportunities can check out Aavegotchi Malaysia and Axie Infinity Malaysia groups
I’m barely scratching the surface here – there are loads of crypto communities out there and so many things to do. It’s honestly a fun rabbit hole to go down into, and if you happen to make a bit of money in the process, consider it a bonus 🙂
#5 – 5 Rules to not get scammed when you invest in cryptocurrencies in Malaysia
Remember all these as you explore the crypto world:
Rule #1 – ALWAYS check if you’re buying from the right platform
Check for https, check spelling of URL and social media profiles, check everything.
Rule #2 – Buy from those 3 platforms
I understand you might want to look around other ways to try and buy cryptocurrencies in Malaysia for cheaper, and yes it’s possible, but you’re taking an unnecessary risk, especially if you’re new in all this.
One – P2P platforms like Remitano and Localbitcoin is rife with scammers.
Two – direct dealing is hella dangerous. If anyone ever contact you to buy or sell, just ignore and block them.
I’m not even joking about the ‘holding a gun to my head’ part. Crypto robberies happen. This fella was tortured with a drill in front of his 4-year old daughter.
Just pay the exchangers’ fees. You’ll be safer.
Rule #3 – Keep your crypto in multiple places
If you have ‘a lot’ (define yourself what constitutes ‘a lot’), then I highly recommend you to distribute your stash around and not keep your cryptocurrencies in one location/wallet. Why?
- You might get hacked. Remember, transactions are not reversible and aside from a police report, there’s nothing much you can do. Reminder to set up your 2FA if you haven’t.
- The exchange might get hacked OR suffer insider theft. It’s happened to many reputable exchangers before (not in Malaysia AFAIK tho)
- Even if you keep all your stash yourself via cold storage methods like paper wallets or hardware wallets (I use Ledger Nano S; RM300ish per device), *you* might forget your passcode or seed address.
- Only get your hardware wallet from authorised resellers like CryptoBilis! Tampered hardware wallet is also another type of scam
Spreading your crypto around is not a bad thing actually. The ‘bonus’ is getting hands-on learning – the more wallets and platforms you try, the better.
Also, you might even get random airdropped coins – tokens given out as part of a new project’s marketing. This is the weirdest form of passive income that I have – all I did was keep my funds in these places, and later I find out I have additional digital assets.
Rule #4 – Join a community
The longest-running bitcoin community in Malaysia, Bitcoin Malaysia #1 Group encourages discussions and sharing, and organises free (and some paid) webinars and events. Feel free to ask questions, usually people are kind enough to answer. Check the latest happenings here.
You can also type ‘scam’, ‘scammer’ etc in the search box and see other types of seasonal and creative scam methods. Important: Holding cryptocurrencies is a commitment – you have to keep updated with the latest scam methods.
Rule #5 – Be a hodler not a trader
Hodlers (the misspelling is intentional) are people who buy – either little by little or big upfront amount – then don’t sell, despite the market condition, unless necessary (financial emergencies etc).
Hodlers make peace with volatility. The price goes up, the price goes down, but life goes on.
For the most part, I am a hodler.
Traders, on the other hand… do the whole chart thing, the technical analysis. It’s like forex trading but on crack. Unlike currencies pairing or the stock market, the crypto market opens 24/7.
I don’t really have much to say to traders, except (1) reminding you day trading is haram, (2) good luck, don’t trade money you can’t afford to lose, and (3) don’t believe that copy-trading is ‘easy money’ – I lost everything there when I tried it out lol.
#6 – [Muslim corner] Is cryptocurrency halal? How to calculate zakat on cryptocurrency?
Is cryptocurrency halal?
The short answer is yes , if you don’t take excessive risks and acquire them through legal and ethical means. The long answer can be found at Securities Commission’s Digital Assets from Shariah Perspective page.
How to calculate zakat on cryptocurrency?
In Malaysia, both Perlis and Johor Fatwa Council has decreed that bitcoin (and by extension, other cryptocurrencies treated as digital gold) are zakat-able. The calculation is (taken from news article):
“Adapun pengiraan zakat untuk Bitcoin ialah nilai terendah unit Bitcoin dalam satu tahun didarabkan dengan bilangan unit Bitcoin, kemudian ditambahkan dengan keuntungan hasil dagangan sepanjang tahun sebelum jumlahnya didarabkan 2.5 peratus”.
#7 – Can cryptocurrency be converted to cash?
Yes, you can sell any of the 5 approved cryptocurrencies directly on the 3 licenced exchanges and receive RM, which you can withdraw directly to your bank accounts.
My recommendation for new users: make use of any new user promo when you start (*cough Luno gives you RM50 if you buy RM500, or instant 10% ROI if you use my code ‘LNSURAYA50′ cough*), then learn how to use the exchange feature (rather than the instant buy/sell feature) so you can save money on fees.
Here Suyin explains how to use the interface to get the cheaper fees:
#8 – Are gains from cryptocurrency taxable in Malaysia?
According to this RinggitPlus article,
The Inland Revenue Board (LHDN) has clarified that cryptocurrency investors who actively trade their assets at the digital asset exchange (DAX) are required to declare their gains for their annual income tax.
So the answer is, no, capital gains from cryptocurrency is not taxable, but profit from trading is taxable.
To clarify: If you regularly and consistently and with strategy buy and sell cryptocurrencies, that’s trading = taxable. But if you just buy to keep for long term, then your gains are not taxable.
#9 – Why are there two Bitcoins?
So why is there Bitcoin and Bitcoin Cash? Why two?
The short answer is a long time ago, the Bitcoin community disagreed on the best way to scale bitcoin to allow more transactions without congesting the network (and resulting in high fees). They had different solutions to solve the same problem.
So Bitcoin split into two: Bitcoin (BTC) and Bitcoin Cash (BCH) – two sets of data ledgers that implement different solutions but came from the same ancestry. The event was quite notable and covered in Bitcoin 101 videos, like the one below.
(Actually, there were more bitcoin splits – also called forks – and also bitcoin copycats. So just be careful when you’re buying bitcoin or doing swaps, just make sure you’re getting the right one. Here are some of the other bitcoins:)
From an investor POV, both Bitcoin and Bitcoin Cash has potential. They’re both digital assets and tradable.
#10 – (New) Making money with cryptocurrencies and DeFi
Ok, so I mentioned above that I’m mostly a hodler. However, I’ve also been venturing in DeFi – Decentralised Finance.
What that means is, I am experimenting with earning money by putting my digital assets to work.
The simplest analogy I can think of is property investing: same to how one can earn both capital gains AND rental yield with property, one can earn from hodling AND profit from staking and yield farming with crypto. It’s one way to earn money while riding out bear markets (plural because it happens often haha).
Now, DeFi is relatively very new area. It’s very experimental and definitely very risky. I don’t recommend beginners to start with this. My own personal rule is to only play with the capital gain profit, not fresh funds.
You can find a lot of DeFi guides online, but I suggest reading CoinGecko’s How to DeFi book (or at least peek at the chapters) so you have an idea of what you’re getting yourself into.
Aside from this, there are other ways to make money in DeFi. And not to mention the many, many job opportunities available for techies and non-techies alike, which allows you to earn your salary in crypto. This is what I did – my decision to receive crypto as payment for my writing work years ago was one of the best decisions I ever made!
Here is my own personal journey with DeFi: I Am Self-Learning DeFi (Decentralised Finance). Here’s Why.
Long-term hodlers, what else should people know about buying cryptocurrencies? What do you wish you know when you first started? How is your experience like as a member of the crypto community?
Leave your advice and experience in the comments section for all of us to learn 🙂