Just recently, the Bank Negara Malaysia (BNM), the country’s central bank, has issued drafted digital currency regulatory guidelines for citizens and businesses residing in the region. The new regulations will fall under the country’s anti-money laundering and anti-terrorism financing act of 2001. If the guidelines are approved, cryptocurrency trading platforms must provide digital asset trade volume statistics, identify all customers, and also monitor transactions going in and out of the exchange.
Why are certain governments only concerned with regulating bitcoin because of terrorism and money laundering? is it that at least these governments should not worry about guaranteeing the rights of investors who use the exchange? regulating the exchange can help reduce the frequent cases of abuse that many exchange do with their clients. But it seems that regulators are not worried about ensuring that there is security in the exchange, that the exchanges respect their customers and do not steal money from their customers.
You have to realise that there's a dearth of fintech expertise in these public offices, never mind blockchain or crypto know-how. Malaysia has a unique political relationship, seen largely by the West as a moderate ally, within a secular state with Islam as its official religion, and yet still enjoying the trust and friendship of nations like North Korea and Iran. This has been instrumental to its economic policies for a very long time and is worth protecting.
So for them, if Bitcoin could threaten compliance to the network of banking and finance it enjoys, then that is a chief concern.
Also, they already are taking advise from at least one exchanger on how to go about regulating, and see, this is up for public review and feedback.