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Be Wary Of Crypto Scams In Malaysia

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The COVID-19 pandemic outbreak shows an increasing trend of hackers and scammers stealing information and financial data since many business operations have shifted to global scale, and consumers have an increased dependence on online payment systems.

This is true for cryptocurrency or crypto investments. But why is crypto scams in Malaysia still on the rise despite countless news regarding it that have made headlines both worldwide and nationwide?

The possible reason behind this is the attractive and fast return of investment. Success stories of those who are lucky enough to succeed in this investment became the fascination for others to do the same.

After all, crypto investments do exist and are real. In Malaysia, the potential is massive as our financial industry is accelerating into Fintech and digitalisation as portrayed in the Bank Negara Malaysia (BNM) Financial Sector Blueprint 2022-2026 and Malaysia Fintech Report 2022.

Shariah wise, the legitimacy and the nature of trade plays a big role in determining whether an investment is permissible or otherwise. It is reminded that Muslims are prohibited to invest in something which contains element of gambling or an investment which involved speculation in its nature of trading.

The importance of the legitimacy and nature of investment, in relation to the works of Imam Al-Ghazali, was described in his Magnum Opus, Kitab Ihya Ulumuddin. Al-Ghazali mentioned that the understanding of Fiqh is crucial as the action taken in making investments are properly managed and done according to the Shariah.

Checklist On Crypto Scams In Malaysia

investment scams

It is best to refer to the two checklists below before getting involved in any crypto investments, or you may expose yourself to crypto scams in Malaysia.

1. Checklists regarding investment and investing in crypto:

  • Study the investment model, risk, and return to see whether it is reasonable.
  • Muslims can check regarding the Fatwa given on cryptocurrency investments and if it is permissible, check further if there are any circumstances where a crypto investment is considered impermissible? There are many other pointers given by the Shariah Advisory Council (SAC) regarding Islamic investments.
  • When in doubt, you can check with the Compliance Officer from Bank Negara Malaysia, Securities Commission Malaysia (SC), Ministry of Domestic Trade and Consumer Affairs, Cybersecurity Malaysia or other relevant authorities regarding the licensing status of the local or foreign investment company or find out if there are any latest warning issued regarding cryptocurrency investments.

2. Checklists in identifying and avoiding crypto scams in Malaysia:

  • You could contact the National Scam Response Centre (NSRC) if you realised you had been scammed and provide the authorities with the relevant details.
  • To check whether the investment account has any police report record linked to its bank account number. This can be done through the website of the Royal Malaysia Police Commercial Crime Investigation Department, which is supported by Bank Negara Malaysia (BNM), Ministry of Domestic Trade and Consumer Affairs (MDTCA) alongside with the Ministry of Communication and Multimedia Commission (MCMC).
  • When the transaction amount is suspicious, the Bank officers might stop it for the purpose of due diligence. Be cautious if the Bank officer advice you not to proceed with the transaction without providing any specific reason. They usually have the basic background detail regarding the account you were transferring money to. If you had transferred the money and regretted it, you may call the Bank immediately to cancel it.

Although praise should be given to ‘financial advocates’ who hunt after scammers personally in real life, prevention is better than cure. In this case, it is better to be an informed investor. Hopefully the checklists above can prevent you from becoming a victim of crypto scams in Malaysia.

About the Author

Azah Atikah Anwar Batcha has an Accounting, Finance, Auditing, and Islamic Finance background. She has worked with two of the Big four firms prior to pursuing her postgraduate studies at University of Technology Malaysia (UTM), Kuala Lumpur. She can be contacted at aaabwrite@gmail.com

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