Indonesian regulator bans financial companies from facilitating crypto trading – Regulation

The Indonesian Financial Services Authority (OJK) has banned financial companies from using, marketing and/or facilitating crypto trading. The financial regulator also warned the public to always be wary of fraudulent Ponzi schemes under the guise of crypto.

Crypto warning from Indonesian regulator

The Indonesian Financial Services Authority (OJK), the Jakarta-based government agency that regulates the financial services sector, warned on Tuesday that financial companies are not allowed to offer or facilitate the sale of crypto assets.

The warning was conveyed by OJK Supervisory Board Chairman Wimboh Santoso on the regulator's official Instagram account. The OJK was quoted by Reuters as saying:

OJK has strictly prohibited financial services institutions from using, marketing and/or facilitating trading in crypto assets.

The regulator also warned the public about investing in crypto assets. “Crypto assets themselves are a kind of commodity that have fluctuations in value that can rise and fall at any time, so people need to understand the risks,” the OJK explained. However, cryptocurrencies cannot be legally used for payments in Indonesia.

Additionally, the financial regulator reminded the public to always be wary of fraudulent Ponzi schemes under the guise of crypto. The OJK was further quoted as saying:

Please beware of allegations of Ponzi scheme scams in crypto investments.

The OJK stated that it does not monitor or regulate cryptocurrencies. The regulation and supervision of crypto assets in Indonesia is carried out by the Commodity Futures Trading Authority (CoFTRA) and the Ministry of Commerce.

The ministry is currently facilitating the establishment of a digital asset exchange called the Digital Futures Exchange, which officials say will be launched in the first quarter.

According to crypto payments company Triple A, it is estimated that over 7.2 million people, or 2.66% of Indonesia's total population, currently own cryptocurrencies. Additionally, Ministry of Commerce data cited by the media shows that crypto transactions reached 859 trillion rupiah ($59.83 billion) last year, a significant increase from 60 trillion rupiah in 2020.

What do you think about the Indonesian regulator banning financial companies from facilitating crypto trading? Let us know in the comments section below.

Kevin Helms

As a student of Austrian economics, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the interface between economics and cryptography.

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