Malaysia’s largest independent financial services company, Kenanga Investment Bank Berhad, wants to add cryptocurrencies to its investment portfolio. To do this, the firm is going through the acquisition route.
Purchasing Stock in Licensed DAX
In a Feb 8 media release, Kenanga confirmed that it has reached agreements with Tokenize Technology to purchase a 19% equity share in its exchange arm, Tokenize Exchange. The funding round was completed through Kenanga’s private equity firm, Kenanga Private Equity Sdn Bhd.
Tokenize Xchange is one of the three licensed Digital Assets Exchanges (DAX) by the Securities Commission (SC) Malaysia. Tokenize Xchange is the second-largest DAX in Malaysia by traded market share. It is an online exchange that lets customers trade on popular digital assets like Bitcoin (BTC) and Ethereum (ETH) predominantly.
Speaking on the auspicious occasion, Datuk Chai Wai Leong, group managing director of Kenanga Investment Bank said:
“Our curiosity in digital property goes past Bitcoin and different generally traded cryptocurrencies. We consider that the know-how behind digital property may be very highly effective and the emergence of digital property sooner or later is inevitable.”
His counterpart Hong Qi Yu and CEO of Tokenize Malaysia also spoke concerning the merger, praising the experience of Kenanga and how it could help them grow their operations in Malaysia.
Before the recent dabble in cryptocurrencies with Tokenize Technology, Kenanga Investment Bank went into partnership with Japan’s e-commerce company Rakuten in 2017. The joint-venture birthed Rakuten Trade, which is an online stock trading platform operating in Malaysia. It also went into a partnership with Merchantrade Asia which saw it launch Kenanga Money; Malaysia’s first stockbroker e-wallet.
No further details were released concerning the partnership.
SC Malaysia Toughens Regulatory Framework
Following the recent boom in crypto-focused businesses, a lot of financial institutions are paying closer attention to the crypto space. With its increased popularity, it has drawn the focus of governments and their respective financial regulatory agencies to the nascent market which is what the Securities Commission of Malaysia set out to do with a revisit of its crypto framework.
The SC Malaysia released revised guidelines on digital asset custodians and initial exchange offerings (IEOs) in October 2020 saying the amended framework is looking to encourage “responsible innovation in the digital asset space.” The new framework aims to address the issues of money laundering and terrorist financing of which crypto assets have been associated with recently by world governments.