This article first appeared in The Edge Malaysia Weekly on April 28, 2025 - May 4, 2025

Seven months after being released from a California prison, Changpeng Zhao, the co-founder and former CEO of blockchain giant Binance, last week made his appearance in Kuala Lumpur, urging regulators to relax their rules on cryptocurrency.

Indeed, his meeting with Prime Minister Datuk Seri Anwar Ibrahim to discuss making Malaysia a crypto and blockchain hub has drawn a lot of attention.

Zhao was sentenced to four months in jail in May last year after pleading guilty to his failure to stop criminal and terrorist groups from freely trading on Binance. He agreed to pay a US$50 million (about RM218.8 million) fine and stepped down as Binance CEO.

Soon after the meeting, Anwar, in a social media post, encouraged continued discussions with agencies such as the Securities Commission Malaysia (SC), Bank Negara Malaysia and Ministry of Digital to explore ways to facilitate and promote responsible innovation.

Anwar highlighted the fact that government leadership is essential to drive blockchain adoption, for example through digitisation and exploring the tokenisation of financial instruments and other use cases.

It is believed that Anwar’s discussions with Zhao could be a follow-up to the exploration of the idea of drafting a digital finance policy, a plan that Anwar first revealed early this year. The SC had said the initiative aims to complement the nation’s digital transformation agenda and would position Malaysia as a key player in the global digital finance landscape.

Although digital assets have entered the mainstream in recent years, with more young investors turning to crypto investments, any decision to change or relax the rules in the crypto space should not be made lightly. Investor protection and interest must always be the priority.

The government should not be swayed by those who want full-scale deregulation of risky digital assets that are not backed by anything with intrinsic value.

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