The Malaysian based auto manufacturer Proton Holdings, ousted the dealership branch in Seri Kembangan, a town in Selangor district, for accepting cryptocurrencies as payment. The Selangor-based dealer took its own decision to receive payments in bitcoin which was not consented by the auto manufacturer.
Bitcoin Not Accepted Here
The issue is Proton Holdings never authorized or gave freedom to dealers to accept payments in virtual currency. This resulted in the suspension of the dealership agreement until further investigation. Many believed it to be the Malaysian regulators that suspended the dealership, but this proved to be untrue. The company news release read:
“The company does not recognize such transaction or offer and that the photo that suggests such transaction was independently initiated by a dealer of PROTON. Operations by the dealer have been suspended, pending further investigation.”
However, the dealership owner Tony Yeu defends his decision to accept cryptocurrencies to be more beneficial for business. Yeu told The Sun Daily that inquiries increased immediately after the dealership began taking virtual currencies. Meanwhile, Abdul Rashid Musa, Proton Vice-President of Sales and Marketing, said:
“While we encourage innovative ways to increase sales, promotional activities must adhere to its guidelines and be endorsed by the major shareholder of the car manufacturer. In order for us to pick up our sales numbers, we shall be taking further steps for more attractive consumer campaigns, and improvement of product and service quality.”
Dealer Still Offers Crypto Service
Yeu, the owner of Anjur Kayangan Auto Sdn Bhd, mentioned a greater interest from prospective customers after advertising about the bitcoin service. The local announcement saw over ten walk-in customers a day, in addition to the increase in the number of inquiries over the phone. According to the owner, the business was lagging and required something exciting to draw in more customers. He pointed out:
“Bitcoin is not illegal and this is just a payment method we offer our customers. The sum for either a down payment or total amount will be transferred to my personal Bitcoin account. Once the payment is in, a receipt will be issued. To Proton I will forward the amount in cash.”
Even though the advertising banners have been taken down by the dealership due to pressure from Proton holdings, Yeu still claims to offer the crypto service to his customers. The auto industry has taken a hit after the introduction of Goods Services Tax in 2014. Proton sales have dropped from 72,291 to 71,000 in the last year; the company attributes it to the falling taxi orders.
The Central Bank of Malaysia does not recognize virtual currencies as a form of legal payment, but it also has yet to ban cryptocurrencies entirely. According to regulations, crypto exchanges must report activities to the Malaysian Central Bank. Recently, Malaysian regulatory authorities suspended London-based Luno exchange operations due to an imminent tax investigation on its users. Recently, in the same Selangor district of Malaysia, respective enforcement agencies raided and shut down two illegal bitcoin mining premises.
Do traders in Malaysia fear rising actions from government authorities?