The Spectacular Failure of Malaysia’s Crypto Political Fundraising Platform

Whenever new technologies emerge, there is a lot of buzz surrounding it. Cryptocurrencies and blockchain have been hailed as a world-changing technology. But truth be told, as with anything in the world, there are clear limitations as to what blockchain can do. Many do not understand these fundamental limitations while trying to implement revolutionary ideas only to be disappointed in the end. The Harapan coin of Malaysia is one such initiative which aims to tackle all of Malaysia’s problems with a single silver bullet. Unlike most ICOs, it has a more political flavor. Its creators proclaim it as “The World’s First Crypto-Politic ICO”. It aims to tackle corruption, act as a vehicle for political financing and much more. Let’s look at how the Harapan coin fits into the larger Malaysian picture.

Regulations in cryptocurrencies

Malaysia has been trying to bring about regulations to cryptocurrencies from late 2017. Malaysia, following the lead of Hong Kong and Australia, decided in the September of 2017 to keep a positive outlook on the new technology, indicating that Malaysians will be allowed to participate in dealing with cryptocurrencies legally. Under the proposed regulations cryptocurrency transactions will be subjected to laws similar to those imposed on banks, but they will not be treated as legal tender automatically. New regulations on ICOs will come into force in Q1 2019. Meanwhile, entities who wish to work with cryptocurrencies have been advised to approach the central bank.

History of scams and corruptions

Malaysia has been hit by many corruption scandals lately. In 2015, the 1Malaysia Development Berhad (1MDB) scandal revealed a multi-million dollar embezzlement into accounts associated with the Prime Minister, Najib Razak. 1MDB is a state-owned investment fund. Before that, the nation lost billions in a forex scandal involving Bank Negara Malaysia, where the lack of oversight led to the bank doing risky trade. In early 2017, a scandal involving Bumiputera Malaysia Finance (BMF), a subsidiary of Bumiputera (Bank Bumi) based in Hong Kong was unearthed from declassified CIA documents. The bank made huge bad loans during 1979 and 1983 to numerous Hong Kong property speculators, including the Carrian Investment Limited.

What can cryptocurrencies do?

The scandals and scams have provoked many in Malaysia to think about blockchain based solutions to solve the country’s troubles. That is how the idea of  Harapan coin was born. The Harapan coin was conceived in early 2017. The word Harapan literally means hope. It was created to make an impact in the 14th general election to be held in May 2018. In the website of the Harapan coin, it states that the people behind the project are patriotic and concerned Malaysian citizens from both within and outside the country. Simply put, it was a mechanism to fund the election effort of the united opposition, squarely putting the blame of corruption and poor governance on the current government.

What happened?

The sitting government of Prime Minister, Najib Razak, was overthrown and the united opposition Pakatan Harapan won, ending 61 years of the continuous seat in power. So did the Harapan coin actually do its wonder? Unfortunately, it seems the coin has failed. The coin was supposed to raise $257 million in two rounds. However, the figure from the website suggests that they could barely raise a measly $800. Although some reports suggest $123 million was raised, these reports have not been verified yet. The coin is co-founded and supported by the Malaysian Minister of Federal Territories, Khalid Samad. In fact, he is the one who is currently promoting the coin. A quick glance at the project reveals that the coin has failed to deliver.

A spectacular failure

As with many projects related to cryptocurrencies, the Harapan coin failed. What the future holds for it is a big question now that the opposition is in power and the underlying cause to topple the ruling government serves no purpose. It’s easy enough to have an idea, but delivering it is the hard part. Something that many of the promoters of crypto-related projects do not understand. This is not to say that ICOs are not a good way to raise funds for a political campaign but it takes more than just creating a new ICO and a political slogan to get people to invest in it.

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