PETALING JAYA: Cryptocurrency transactions into cash will see sellers having to conduct customer due diligence and keep proper records on the customer and transactions, when the regulatory structure on digital currencies comes into force next year. Today, Bank Negara Malaysia (BNM) governor Tan Sri Muhammad Ibrahim said the central bank will designate persons converting cryptocurrencies into fiat money currencies as “reporting institutions” under the Anti-Money Laundering (AML), Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 beginning next year. Fiat money refers to currencies backed by government. According to BNM’s website, the obligations imposed on reporting institutions include conducting customer due diligence; keeping proper records on the customer and transactions; implementing AML/CFT compliance programme; reporting suspicious transaction report (CTR); and reporting CTR for cash transaction exceeding RM50,000 or whichever amount specified. In his welcoming speech at the “Third Counter-Terrorism Financing Summit 2017” here today, Muhammad said the move is aimed at preventing the abuse of the system for criminal and unlawful activities as well as ensuring the stability and integrity of the financial system. BNM cited the move as the foundational work for the development of a regulatory structure for digital currencies. Bitcoinmalaysia.com founder Colbert Low, when asked to comment on the announcement, said the execution of the regulator’s initiatives is being closely watched by market players. “I’m not sure how they (BNM) are going to enforce it. That’s on everybody’s mind now because this is an open market ... and how are you going to get people to register?” he asked. Low headed the Malaysian operations of Bitcoin exchange BitX, now know as Luno, from 2014 to 2016. He is now the executive adviser to Bloktex and founder of Celebrus Advisory, a blockchain advisory firm. He told SunBiz the task of regulating the market will be daunting with over 1,500 types of digital currencies in the market. In order to convert cryptocurrencies into cash, a crypto holder generally needs to perform the transaction on cryptocurrency platforms, after which the cash will be transferred to the bank account given. “It makes sense to trade on a platform if it is a big amount, you may not want to go individual because you may not trust an individual,” Low said. As at 5.30pm today, Bitcoin traded at US$8,264 (RM34,092). Year to date, it has jumped more than eight times. The second largest cryptocurrency, Ethereum, settled at US$367 (RM1,514), a 45-fold jump since the beginning of the year.