KUALA LUMPUR (Oct 9): Malaysians are set to officially welcome its fifth digital asset exchange (DAX) or cryptocurrency trading platform in the first quarter of 2024.

Hata, the fifth local DAX licensed and regulated by the Securities Commission Malaysia (SC), is founded by Luno’s former Asia Pacific general manager David Low.  

The exchange operator, Hata Digital Sdn Bhd, has been granted conditional approval by the SC to operate a DAX. It can start taking investors’ money for trading, once it fulfils the necessary requirements set out by the regulator in the next six- to nine months.

Notably, Hata is also the first DAX to receive the digital broker approval from the SC, which allows it to show trade orders of other exchanges on its website or mobile application (app), and execute its users’ trades by matching them with those of other exchanges.  

Alternatively, Hata can refer its users to cryptocurrency prices of other exchanges, and quote them with those prices. Its users can then decide whether or not to execute their trades based on the quoted prices. However, these exchanges that Hata trade with, have to be licensed by an authority in a “competent jurisdiction” such as the Monetary Authority of Singapore (MAS), and are subjected to the SC’s approval, Low said.

Low’s recent move adds an interesting dynamic to the local digital asset industry, as he was known as the person who played an instrumental role in growing Luno’s presence in Malaysia and Southeast Asia.

When Low left Luno in April, Luno was widely known by industry players to command over 90% of the local cryptocurrency trading market share.

Some put the figure as high as 98%, making it the single, most dominant force in the industry.

Luno, which is also the first licensed DAX locally, saw about 420,000 and 200,000 new accounts registered in 2021 and 2022 respectively, higher than new Central Depository System (CDS) accounts opened with Bursa Malaysia in those two years.

By striking out on his own, Low is set to compete with his former colleagues and company which he had poured in many efforts to nurture and grow.

Other than Low, Hata’s two other co-founders are its chief revenue officer Darien Ng and its chief technology officer Chong Kwai Kun, who have deep expertise in blockchain technology and software development in Malaysia since 2018, Low said.

“SC’s decision to grant us conditional approval to operate a DAX represents a vote of confidence in us and the digital asset industry. This is a significant milestone for my team and I at Hata, after months of extensive efforts.  

“Hata wants to enable safe and effortless cryptocurrency access and we look forward to being a one-stop and reliable platform for our customers, with our suite of products and services,” he said.

“With the goal of challenging the existing norms, we plan to make digital assets-investing easier to institutional investors, businesses and high net worth individuals in Malaysia. And we look forward to launching the platform soon,” he added.

Low also lauded SC’s effort in expanding the regulated market operator framework to allow the DAXs to operate as a digital broker.

He said that Hata also obtained a money broker licence from the Labuan Financial Services Authority.

“The team at Hata (www.hata.io) commits fully to operate as a reliable platform that’s compliant and safe. And we look forward to working together with market participants and the SC, to uphold the integrity and quality of the regulatory environment in Malaysia,” he said.

The three other DAXs are Sinegy, Tokenize Xchange and MX Global.