Indonesian Regulator Warns About Cryptoasset Offers, Sales by Financial Services Companies

Source: AdobeStock / De Visu

 

As major crypto industry players are intensifying efforts to access the Indonesian market, the country’s regulator Financial Services Authority (OJK) has reminded market participants that financial services companies are not allowed to offer and facilitate sales of cryptoassets.

The agency said in a tweet that cryptoassets are a type of commodity that fluctuates in value, meaning that it could "go up and down at any time," stating that people must understand the risks. 

"You also need to know that the OJK does not supervise and regulate crypto assets,” said the regulator, adding that cryptoassets were supervised by the Commodity Futures Trading Supervisory Agency (Bappebti) of the Indonesian Ministry of Trade. Bappebti has regulated cryptoassets since 2018.

The Indonesian regulator further stated that it “firmly bans crypto facilitation by financial services institutions,” referring to a quote by its head, Wimboh Santoso. “The OJK has strictly prohibited financial service institutions from using, marketing, and/or facilitating trading of crypto assets,” Santoso was quoted as saying.

In a statement provided to Cryptonews.com, Sekar Putih Djarot, the spokesperson for the OJK, said the institution's latest communication was designed to “emphasize this issue to ensure that financial service institutions do not facilitate suspicious activities that might be fraudulent; such as moneylender, gambling, money laundering, illegal investments and/or other Ponzi-scheme activities.”

The spokesperson also said that the Indonesian regulator intended to warn “other ministries/agencies supervising entities outside [of the] OJK’s supervision — i.e. entities that also manage public fund and carry out savings and loans, trade, and/or investment activities —  to ensure financial institutions' accounts are used in accordance with applicable regulations.”

The latest development adds to the regulatory instability in the major South-East Asian economy as major crypto industry players are making efforts to ramp up their foothold in the country’s market.

Last month, major crypto exchange Binance set up a joint venture with a consortium led by MDI Ventures (MDI) to develop a new Indonesian-based digital asset exchange, providing its asset management infrastructure and technology to the project. MDI is the venture capital arm of the multinational telecommunications conglomerate Telkom Indonesia.

The venture “is part of Binance's broader strategy to grow the global blockchain ecosystem,” Binance said.

The partnership aims to secure access to more than 170m consumers in the world's fourth most populous country, according to the statement.

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Learn more:
- Indonesian Govt To Launch Crypto Exchange to Get a Piece of Crypto Pie
- Giant Indonesian Market Gets 'First' Regulated Local Crypto Exchange

- Binance Has Been Withholding Information From Regulators, Claims Reuters
- Crypto Exchanges in 2022: More Services, More Compliance, and Competition

- Crypto Investment Trends in 2022: Brace for More Institutions and Meme Manias
- Crypto Adoption in 2022: What to Expect?
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(Updated on January 27, at 08:20 UTC with comments from the OJK.)