Cryptocurrency tax evaders in Malaysia see crackdown, receive warnings from authorities

Malaysian authorities are said to be cracking down on cryptocurrency tax evaders. As part of a special investigation dubbed “Ops Token,” officials from Malaysia’s federal agency Inland Revenue Board (IRB) allegedly conducted raids in multiple locations identifying companies that were not reporting their cryptocurrency-related commitments. Through these taxes, the Malaysian administration, much like India, is trying to keep a trail of cryptocurrency-related financial transactions that would otherwise be largely anonymous and could be exploited for illegal activities.

The IRB is said to have joined forces with the Royal Malaysia Police and CyberSecurity Malaysia (CSM) to identify tax evaders. A team of 38 security personnel were part of the team that conducted raids at ten locations located in the Klang Valley, an area relationship from the Malaysian Reserve said over the weekend.

In Malaysia, cryptocurrencies are said to be classified as securities. Although cryptocurrencies are not considered payment options, their exchange is permitted in Malaysia. However, cryptocurrency-related businesses operating in the country fall under the national tax regime.

As per StatesmanMalaysia’s cryptocurrency market is expected to reach the valuation of $306.6 million (around Rs 2,556 crore) in revenue by the end of 2024. Statista has also estimates that three million Malaysian residents are currently active in the crypto space.

Authorities are trying to curb tax evasion cases nationwide. Malaysian Prime Minister Datuk Seri Anwar Ibrahim in March reportedly instructed authorities to crack down on tax evaders.

His direction to conduct audits on companies involved in the crypto sector and take action against defaulters came after Malaysia reportedly lost RM6.34 billion or $1.3 billion (around Rs. 11,222 crore) due to tax evasion.

In Malaysia, the punishment evading taxes can result in a fine of up to RM 20,000 0r $4,237.74 (approximately Rs. 3.53 lakh) and up to six months in prison.

Previously, Malaysia had cracked down cryptocurrency miners to prevent electricity from being stolen for mining operations.

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