Malaysian cryptocurrency firm Kodinar raided by authorities for illegal deposit taking

PETALING JAYA: Several enforcement agencies led by Bank Negara Malaysia (BNM) raided nine premises and arrested six company directors of cryptocurrency company Koperasi Dinar Dirham Bhd (Kodinar), which is registered with the Malaysia Cooperatives Societies Commission (SKM), for alleged illegal deposit-taking Tuesday.
Kodinar launched its own cryptocurrency, Pitiscoin on September 2017. The digital coin was created on the blockchain platform 2.0 Ethereum (ERC 20).
BNM said Kodinar was suspected to have committed an offence under the Financial Services Act 2013 (FSA) and the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA).
Nine premises related to the company located in Kuala Lumpur and Selangor and its related affiliates were raided, where relevant documents were seized to assist in investigation.
Six company directors suspected as masterminds and agents for illegal deposit taking activities were arrested and remanded for two days to assist investigation, it added.
The operation, which included SKM, also resulted in the seizure of eight vehicles valued more than RM1.5 million, RM1.4 million monies in local and foreign currency, 22.5kg precious metals and 114 bank accounts in 12 banks amounting to RM15.3 million were frozen under the AMLA.
The central bank said the authorities are also collaborating with Brunei Financial Intelligence Unit to investigate the company’s operation in Brunei for similar offence.
The central bank said in a statement yesterday, the operation is one of the continuous inter-agencies measures to eradicate illegal financial scheme activities.
Other agencies involved were the National Revenue Recovery Enforcement Team of the Attorney-General’s Chamber (NRRET), Royal Malaysian Police (RMP) and CyberSecurity Malaysia (CSM).
"Under section 137(1) of the FSA, it is an offence for any person to accept deposits without a licence. Investigations for money laundering offence will also be undertaken under the AMLA, where if convicted can subject such person to a fine of not less than five times the sum or value of the proceeds of unlawful activities at the time the offence was committed or RM5 million, whichever is higher, and imprisonment not exceeding 15 years," it noted.
The public are advised not to deal with illegal deposit taking companies for purpose of investment and should refer to licensed financial institutions which are listed on BNM’s website for further information.