KUALA LUMPUR: The Securities Commission (SC) will approach the non-fungible token (NFT) on a case by case basis, subject to the nature of the token and the NFT projects as well as activities that are carried out at NFT marketplace, chairman Datuk Syed Zaid Albar said.
"What we observed currently in Malaysia is that the underlying assets of most NFT are non securities product. The popular application for NFT from what we see are for collectible items such as art, music and others.
"Notably, there are NFT projects that sell their token before the completion of the project," Syed Zaid said at the launch of the SC's Annual Report 2021 today.
He said globally, the International Organisation of Securities Commissions (IOSCO) was also closely monitoring the development in this area.
According to IOSCO's Decentralised Finance Report that was published earlier this month, the organisation had mentioned on a foot note that NFT, a newer entries in the unique assets across all blockchains, had added new characteristics, including the ability for each token to be in some respects unique or "non-fungible".
IOSCO said while NFTs were created using a different software standard, they might represent investment opportunities, as did any other type of crypto-asset depending on the facts and circumstances.
Meanwhile, according to the SC's Annual Report 2021, Malaysia's digital asset market continued to grow last year despite market uncertainties following Covid-19, with about RM21 billion in digital assets traded across the four registered digital asset exchanges (DAXs).
The SC said investor interest boosted the total number of investment accounts by nearly 300 per cent to about 760,000 from more than 190,000 in 2020.
The commission said it continued to facilitate new digital assets on DAXs, with the approval of Bitcoin Cash (BCH) in March 2021 as an additional permissible digital asset.
Other digital assets permitted to be traded on DAXs include Bitcoin, Ripple, Ethereum and LiteCoin.
The SC said digital investment management segment expanded its capital market offerings with total assets under management of more than RM1 billion as at end-2021.