They can't claim it is illegal if there is no law against it in the first place.
However, as we all know, in Malaysia, the authorities can make life pretty miserable for you if they really want to.
So, as others have already mentioned, just keep your transactions to below RM50k each.
And when you are selling bitcoins in Malaysia, for example on Luno or XBit Asia, basically you are selling a digital asset within Malaysia, to someone inside Malaysia, and getting the payment in Malaysian Ringgit, and then withdrawing from the exchange's Malaysian bank account to your own Malaysian bank account.
At no time does the money travel outside of Malaysia, so there is no remittance to talk about here.
Even if you wanted to "declare" your income, how do you do that? In the income tax filing form, what do you declare cryptocurrencies as?
As it is right now, cryptocurrencies are a grey area......it is not a legal tender currency, not real estate, not stocks/bonds, not intellectual property......
So unless and until the government (efficient as they are) come up with clear guidelines and probably update an existing Act legally, there is no way for them to tax you.
Remember that capital gains are not taxable in Malaysia.
Selling a bitcoin in Malaysia is no different from selling your mint-condition vintage Pokemon collectible cards to your friend at a profit.......i.e. not taxable.
https://www2.deloitte.com/content/dam/Deloi...lights-2017.pdfquite knowledgeable. however, i would like to add one point on selling mint-condition vintage pokemon card at a profit. if you keep on repeat the process buy and sell or make a living out of it. then its taxable, ie badges of trade. however, it sstill grey area... even FOREX trading in overseas platform. worry less, at most they will tax you at % + penalty. you are keeping the remaining % compare to no profit if you do not trade.