Reseacher: Ika Atikah, M.H.
Crypto asset trading in Indonesia has become one of the assets of choice for customers and investors worldwide. Crypto price movements are very unusual and, of course, high risk, but they do not make the intention of customers and potential investors start investing in crypto assets. Crypto asset transactions in Indonesia have indeed become a trend recently, and Bappebti issued specific regulations in early 2018; every year, Bappebti gives policies related to the commodity futures mechanism.
The development of crypto and blockchain transactions is growing massively in Indonesia, such as Metaverse, NFT, and DeFi. Bitcoin mining activity requires an extensive computer network so that it can find problems in any attempt to mine digital currency that requires enormous electrical energy. Cryptocurrencies only live in the digital world as virtual tokens that have tremendous value and can even be negligible depending on market forces. Customers can buy currencies from brokers, store them, and spend with encrypted wallets. Investment in crypto assets is in great demand by the Indonesian people; this is based on data from the Commodity Futures Trading Supervisory Agency (Bappebti) of the Ministry of Trade, the number of investors in Indonesian crypto assets and trading transactions at the end of December 2021 to May 2022 which was initially 11,2 million investors increased to 14,1 million investors.
However, the number of crypto asset trading transactions in Indonesia from January to May 2022 reached 192 trillion rupiahs, compared to commerce in 2021 in the same period. From this explanation, it is evident that crypto asset transactions in Indonesia have grown positively despite the market situation but have not legally dampened public interest in buying crypto assets in Indonesia.
The explanation of crypto assets is also contained in article 1 number 7 of Bappebti Regulation No. 8/2021 that assets are part of commodities that are not digital, use cryptography, information technology networks, and distributed ledgers, regulate the creation of new units, verify transactions, and transactions without the intervention of other parties. With the presence of Bappebti regulations, it provides legal protection in crypto asset trading activities through the physical market of crypto assets on futures exchanges, namely the physical demand of crypto assets that are run using electronic means owned by crypto asset actors for buying or selling crypto assets where market supervision is carried out by futures exchange.
Protection for crypto asset customers, in general, has been regulated in the Consumer Protection Law No. 8/1999 because crypto asset customers are consumers. Consumers are closely related to buying and selling transactions in the trading system involving business actors, goods, and services, so consumer legal protection is critical in making economic activities safe and fair. The security referred to in crypto asset customers is their rights as consumers, which is a severe problem. Customers and traders of crypto assets have an equal position in the principle of freedom of contract, as stipulated in article 1320 of the Civil Code.
Four main reasons are protecting crypto asset customers, namely watching crypto assets and protecting all Indonesian consumers as mandated by the national development goals based on the preamble to the 1945 Constitution of the Republic of Indonesia. Negative technology, watching crypto asset customers as consumers, of course, giving birth to physically and mentally healthy individuals as development actors also means maintaining the continuity of national development; protecting consumers also requires guaranteed sources of development funds from the Indonesian people.
The meaning of customer protection for crypto assets as part of consumers has been regulated in general in the Consumer Protection Law No. 8/1999 Article 1 number 2 briefly explains that consumers are people who use goods and services in the community, both for themselves, their families, other people, even other living things. Consumer law has been applied to all people in the territory of Indonesia. Legal certainty protects consumer rights with special statutory provisions for consumer economic transactions in the trading sector, such as crypto-asset transactions.
Several things need to be known as the main elements of consumer protection arrangements, including knowing between consumers and business actors, consumers having rights, business actors having obligations, consumer protection arrangements in development, consumer protection through legal breakthroughs, and the field of consumer protection concepts. Requires attitude development. The government issued a regulatory policy providing consumer protection in blockchain technology which is increasingly popular in Indonesia. Blockchain is a digital data storage technology as it is known that regulation is a form of legality, entity, and the basis of law enforcement by ensuring that consumers are protected from blockchain technology.
Even though the Indonesian government has set a regulatory policy for PP No. 5/2021 and categorizes crypto transactions as risky businesses. PP No.5/2021 is a derivative of the Job Creation Act. The law regulates Chapter III from article 6 to article 10, which explains the level of business licensing, both risky and high. The Job Creation Act also regulates transaction supervision in Article 11, which is adjusted to the level of risk for the business and the determination of the story based on the level of danger and the potential for trouble to occur.
Article 14, paragraph 1 letter e of the Perbappebti No.11/2021 explains that there are several trading rules which include providing legal protection to crypto customers, namely the registration process for crypto asset customers, statements and guarantees, then obligations and responsibilities, data updating/updates, procedures transactions including buying/selling transactions, deposits, withdrawals, sending crypto assets to other wallets, other activities have been approved by Bappebti. Transaction fees and withdrawal limits are made, transaction security is available, crypto asset customer complaint services are available, crypto asset customers, and force majeure. Prospective customers need to recognize very complex trading before starting a transaction.
There are four things you need to know, namely don’t choose the wrong exchange platform, which checks directly with Bappebti legal and registered crypto players, the risk of volatility where asset prices can fluctuate in a short time, and for reliable crypto customers, crypto price volatility provides benefits, but on the other hand for beginners who do not have the knowledge it becomes a disaster, then the three psychological risks that someone who is not mentally prepared and lack of knowledge can experience FOMO, which is doing irrationally and without thinking carefully, and the last is liquidity risk, not all crypto assets have the same level of liquidity, for someone who does not have a broad understanding of crypto assets is at risk of loss, especially those who need fast funds to buy and sell.
To minimize losses in crypto transactions, business actors must fulfill obligations while actively trading commodities regulated by crypto legal regulations that meet the provisions with 1) any changes to their system, business processes, and issued regulations. 2) implement the commitment to disclose information and data relevant to implementing the provisions in the Bappebti regulations. 3) participate in education and counseling that require the development of crypto assets. 4) implementation of coordination and cooperation with Bappebti, relevant authorities, or ministries. In addition, crypto traders’ assets must have open access to all systems used by Bappebti as supervision and reference to the trading capitalization value of the crypto assets used. Additionally, physical traders of crypto assets must report daily, electronically, and monthly transaction reports to the head of Bappebti. This is very important as a form of monitoring crypto transactions between traders and customers of crypto assets.
Physical traders of crypto assets must apply the principles of KYC (Know Your Customer), CDD (Customer Due Diligence), and EDD (Enchanced Due Diligence) by ensuring the correctness and completeness of crypto asset customer data. Merchants are also obliged to maintain security and are responsible for any loss of assets belonging to customers. Traders can only store crypto assets up to 30% of the customer’s total assets, and the rest must be reserved through the asset repository manager. Online traders carry out asset storage, or hot storage, with a maximum asset storage amount of 30%, and offline storage or cold storage of at least 70% must be insured. Especially for offline storage, one can collaborate with asset storage managers in using token or Wallet storage services and having their token storage system or mechanism. They must maintain the security of assets belonging to crypto customers by considering risk management.
In addition, crypto asset traders must implement Customer Due Diligence on asset customer Wallets by ensuring that the Wallet’s identity stems from criminal acts, money laundering, criminal funds, and the proliferation of weapons of mass destruction. Every trading transaction, including commodity crypto assets, has transactions between parties regulated by specific regulations. In the event of deliberation involving traders and customers, efforts can be made by consensus as stipulated in the contract created by Bappebti regulations. However, if peace is not reached, it can be resolved through the Futures Exchange as written in the agreement or the rules and regulations of the Futures Exchange. Through the Futures Exchange, if it does not reach the point of an amicable settlement, then the parties can settle it through BAKTI (Badan Arbitrase Perdagangan Berjangka Komoditi) or the district court according to the agreement of the parties as stipulated in the agreement made by the two.
