The Malaysian government is intensifying its efforts to combat crypto tax evasion, launching a special investigation codenamed ‘Ops Token’. Officials from the Inland Revenue Board (IRB) have conducted raids across multiple locations, targeting firms suspected of not reporting their crypto-related activities.

This crackdown mirrors India’s approach to regulating the crypto space, aiming to establish transparency and control over crypto transactions which are often anonymous and prone to illegal activities. The IRB has collaborated with the Royal Malaysia Police and CyberSecurity Malaysia (CSM) to identify tax evaders. A team of 38 security personnel carried out raids in ten locations situated in the Klang Valley.

In Malaysia, cryptocurrencies are classified as securities, and while not considered legal tender, their trading is permitted. Crypto businesses operating in the country are subject to the nation’s tax regime.

The move comes as Malaysia’s cryptocurrency market is projected to reach $306.6 million in revenue by the end of 2024, with an estimated three million residents actively engaged in the crypto space.

The Malaysian government is determined to curb tax evasion across all sectors. Earlier this year, Prime Minister Datuk Seri Anwar Ibrahim instructed authorities to clamp down on tax evaders after Malaysia reportedly lost RM 6.34 billion to tax evasion.

Crypto-engaged companies are now facing audits, and those found to be in default will face consequences. In Malaysia, evading taxes carries a penalty of up to RM 20,000 and a prison sentence of up to six months.

This crackdown follows previous measures taken by the Malaysian government to curb crypto mining operations, which were deemed to be siphoning electricity.