Malaysia and Singapore are intensifying their regulation of social media and online marketplaces to tackle the rise in online scams and protect minors.
What Happened: Malaysia will require platforms like Meta Platforms Inc. (NASDAQ:META) owned Facebook, Elon Musk's X, and ByteDance-owned TikTok to obtain licenses by year-end.
The Malaysian Communications and Multimedia Commission (MCMC) stated that platforms must register annually or face penalties of up to 500,000 ringgit ($107,000), reported Nikkei Asia on Tuesday.
Neighboring Singapore has already mandated social media and online marketplaces to detect and act against scams. The Ministry of Home Affairs issued new codes of practice last month, requiring platforms like Mark Zuckerberg-owned Facebook and Carousell to verify sellers' identities.
Experts, including Adrian Hia from Kaspersky, highlighted the need for these measures due to the anonymity of online platforms, which cybercriminals exploit. He said, "Phishing, ransomware, and scams remain the most pressing issues in Southeast Asia." In 2022, Malaysian police reported losses of 2.5 billion ringgit due to online scams.
Singapore saw a record 46,563 scam cases in 2023, with losses amounting to 651.8 million Singapore dollars ($486 million). The new regulations aim to curb these rising numbers by the end of the year.
"The primary objective of the regulatory framework is to ensure a safe and secure online ecosystem for all Malaysians, particularly our children," the regulator, the Malaysian Communications and Multimedia Commission said, according to the report.
Why It Matters: Online scams have become increasingly sophisticated, often leveraging the likenesses of celebrities to deceive users. For instance, Musk has been a frequent target, with scammers using his image to promote fraudulent Bitcoin (CRYPTO: BTC) and cryptocurrency schemes. This trend underscores the urgency for stricter regulations.
The use of deepfake technology to create convincing but fake videos of celebrities has added another layer of complexity to online scams. The Hong Kong Securities and Futures Commission recently warned about a fraudulent platform using deep fakes of Musk to lure victims.
Moreover, platforms like Facebook have faced criticism for their slow response to scam-related issues. A notable case involved TikTok star Grace Wolstenholme, who suffered financial losses due to a fake account impersonating her on Facebook. Despite her efforts, it took Meta five months to remove the fraudulent account.
These incidents highlight the growing need for regulatory measures to protect users from increasingly sophisticated online scams. With platforms like Facebook Marketplace having a massive user base, the potential for scams is significant. The new regulations in Malaysia and Singapore aim to address these challenges by enforcing stricter oversight and accountability.
- Tesla Earnings Are Imminent; These Most Accurate Analysts Revise Forecasts Ahead Of Earnings Call
Photo courtesy: Unsplash
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote