Luno's Malaysian bank account issue remains unresolved

PETALING JAYA: A week after Bank Negara Malaysia released its policy document on cryptocurrencies, London-based digital currency exchanger Luno has not resumed operations in Malaysia due to an outstanding issue with its banker.

In an email reply to SunBiz, Luno Malaysia marketing/community lead Aaron Tang said its bank account is still being locked down.

This is despite having its accounts unfrozen by the Inland Revenue Board (IRB).

“Having a bank account is a basic requirement to operate a digital currency exchange since it involves receiving funds and processing withdrawal. Reactivating our bank account and activating new accounts is our main focus in Malaysia,” he noted.

Tang believes “the slow progress” is due to a clear direction needed by the bank from the regulators on the issues related to cryptocurrencies.

Luno is working with the bank to resolve outstanding issues, he stressed.

Luno has not been able to process deposits or withdrawals in Malaysia since late last year after the IRB froze its bank account pending a probe.

IRB had requested information on all of Luno’s Malaysian customers, including identification, deposits/withdrawals and transactions following concerns over heavy transactions on its platform.

The other three active digital currency exchangers in Malaysia - Coinhako, XBit Asia and PinkExc – were not affected.

Tang said the IRB wants to make sure that Luno complies with standard procedures in Malaysia. Luno has had numerous discussions with the IRB and continues to work with the tax authority to clarify the legislation.

“Overall, the IRB is happy with our responses and has chosen to unfreeze the funds in our account now that they understand that the money is not ours, but belongs to our customers.”

Luno allows the trading of the two largest digital currencies - bitcoin and ethereum – on its platform.

Year to date, bitcoin’s price has fallen 24.1% to US$13,860 (RM54,054), but ethereum’s price was 8.4% higher at US$788 (RM3.073) as at 5pm today.