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MALAYSIA’S fight against financial crime has reached a critical juncture. Official figures show a sharp rise in online fraud and increasingly sophisticated money-laundering schemes. By late 2025, nearly 48,000 scam cases had been reported with losses approaching RM1.92bil. At the same time, financial institutions filed more than 342,000 suspicious transaction reports (STRs) in 2024, up from about 317,000 in 2023.

These figures reflect not only stronger detection but also the growing scale and speed of financial crime. 

Criminal syndicates are exploiting digital payments, cryptocurrencies and AI-driven social engineering to defraud Malaysians and move illicit funds across borders. This is no longer a niche compliance issue; it is a systemic threat that demands a coordinated response from banks, regulators, law enforcement and the public.

Online scams have surged through social media, e-commerce platforms and impersonation tactics. Investment and crypto scams, romance frauds, fake job offers and bogus calls from “government officials” are now commonplace.

Behind these scams lies a vast network of money mules – bank accounts being opened or rented, often by students or economically vulnerable individuals, to move illicit funds. 

Between 2022 and mid-2025, more than 173,000 mule accounts were identified nationwide with nearly 100,000 detected since 2023 alone. By the time enforcement action is taken, funds are already layered through multiple accounts or transferred overseas.

Malaysia has taken important steps to intervene earlier. 

In 2024, banks introduced mobile banking “kill switches”, allowing customers to freeze accounts instantly, and telcos have strengthened the blocking of malicious SMS links.

The launch of the National Fraud Portal ( P) in late 2024 marked a major advance. By integrating data across banks, payment networks and law enforcement, it has significantly shortened response times.

Early results show fraud detection is now 75% faster and identification of mule accounts has increased by 65%.

These gains demonstrate what coordinated public-private action can achieve.

Still, banks must go further. Mule accounts are best stopped at onboarding. Stronger e-KYC (electronic Know Your Customer) controls, better behavioural screening and proactive sharing of red flags must become standard practice.

Digital assets add another layer of risk. While crypto remains a small part of Malaysia’s financial system, it features prominently in crime. Police data indicate that nearly 90% of crypto-related cases involve investment scams. Between 2019 and 2023, 5,507 crypto-investment fraud cases were recorded with losses of about RM417mil.

Ransomware groups increasingly demand payment in digital assets while organised crime networks use crypto to bypass traditional controls. At the same time, improved blockchain analytics have enabled the authorities to trace illicit transactions and recover funds in several cases. 

The lesson is clear: crypto risks must be treated as core AML (anti-money laundering) risks.

Malaysia has made meaningful regulatory progress. In late 2025, the Financial Action Task Force (FATF) upgraded Malaysia to Regular Follow-Up status, recognising stronger laws and improved enforcement outcomes. Amendments to the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA) and related legislation, along with enhanced coordination, were cited as key strengths.

The Companies (Amendment) Act 2024, which mandates beneficial ownership disclosure, has also been significant. 

By late 2025, over 340,000 companies had submitted beneficial ownership information, closing a long-standing loophole used to hide illicit ownership.

Bank Negara Malaysia has tightened e-KYC rules, mandated kill switches, and expanded AML obligations to cover proliferation financing and targeted sanctions. 

These reforms align Malaysia more closely with international standards. 

But effectiveness, not form, will remain the test.

Criminals are adapting faster than ever. 

Only sustained collaboration, smarter use of technology, firm enforcement and public vigilance will protect the integrity of Malaysia’s financial system.

Raymon Ram

Financial crime and integrity expert

The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: Forum@dailyexpress.com.my