Crypto trading activities in
In
Ministry of Trade Regulation No . 99 of 2018 onGeneral Policy for Future Trading of Crypto Asset ("MoT Regulation 99/2018");Commodity Futures Trading Supervisory Agency (Badan Pengawas Perdagangan Berjangka Komoditi or "BAPPEBTI") Regulation No. 5 of 2019 on Technical Provisions on the Implementation of Physical Market of Crypto Asset in Futures Exchange, as lastly amended by BAPPEBTI Regulation No. 8 of 2021 on Guidelines of the Implementation of Physical Market Trading of Crypto Assets on Futures Exchanges ("BAPPEBTI Regulation 8/2021"); and-
BAPPEBTI Regulation No. 7 of 2021 on Decree on the List of Tradeable Crypto Assets in the
Crypto Asset Trading Market .
In this article, we will elaborate on the key points of the legal development of crypto assets trading in
A. General Overview on Legality of Crypto Assets and Cryptocurrency in
Crypto Assets under Art. 1 Point 7 of BAPPEBTI Regulation 8/2021, are defined as intangible Commodities in digital form, using cryptography, information technology networks, and distributed ledgers to regulate the creation of new units, verify transactions, and secure transactions without the intervention of other parties ("Crypto Assets").
It might raise a question as to whether Crypto Assets have the same treatment, definition, and function to cryptocurrency. It is known that cryptocurrency is a sub-class category of Crypto Assets, but not all Crypto Assets are cryptocurrencies. Cryptocurrency is the store of value and method to transfer that value between the currency users.
Pursuant to Art. 1 (2) of Law No. 7 of 2011 on Currency ("Currency Law"), these provisions regulate the mandatory use of Rupiah in:
- every transaction that has payment purposes;
- the settlement of other obligations that must be fulfilled with money; and
-
other financial transactions conducted within the territory of the
Republic of Indonesia .
Observing the mandatory use of Rupiah under Currency Law, it can be concluded that both Crypto Assets and cryptocurrency cannot be used as payment instruments in
This position is also consistent with Art. 34 of
B. Requirements for Trading of Crypto Assets
Crypto Assets can be traded in
- the trading activities are carried out on the basis of distributed ledger technology;
- the traded Crypto Assets shall be in the form of Utility Crypto Assets or Crypto Backed Assets; and
- the traded Crypto Assets have passed the assessment through Analytical Hierarchy Process ("AHP") method as determined by BAPPEBTI.
(Art. 3 (2) of BAPPEBTI Regulation 8/2021)
The AHP mentioned above shall take into account the following provisions:
- the market capitalization value (market cap) of Crypto Assets (coin market cap);
- the trade is a part of a transaction of Crypto Assets in the world;
- the trade has economic benefits, such as taxation, digital economic growth, the information technology industry, and the competence of experts in the field of informatics (digital talent); and
- the asset has passed the risk assessment, which include risks of money laundering, terrorism financing, and proliferation of weapons of mass destruction.
Furthermore, the tradeable Crypto Assets are designated by the Head of BAPPEBTI in the list of Crypto Assets. As per
C. Futures Clearing House
A Futures Clearing House can operate in
- having a paid-up capital of, at least,
IDR 500,000,000,000 (five hundred billion Rupiahs); -
maintaining an equity of, at least, 80% of its paid-up capital as referred
in Point 1; - having reliable guarantee and settlement system, and is connected to Futures Exchanges, Crypto Asset Physical Traders, and Crypto Asset Storage Managers; and
- having a set of rules and regulations for the Physical Crypto Asset Market.
(Art. 9 (2) of BAPPEBTI Regulation 8/2021)
The "reliable guarantee and settlement system" as referred in Art. 9 (2) (c) of BAPPEBTI Regulation 8/2021 shall have the functions of supervising, guaranteeing, and completing the transactions; and ensuring good validation of the balance records and fund transfers for Crypto Asset Customers and the Customers' Assets contained in Crypto Asset Physical Merchants and Crypto Asset Storage Manager for transaction settlements.
D. Crypto Asset Broker
A Crypto Asset Broker acts as a facilitator in Crypto Assets transactions. In this regard, the scope of activities of a Crypto Asset Broker shall, at least, cover:
- selling and/or buying facilities of Crypto Assets and Rupiah currency;
- exchanging one or more types of Crypto Assets;
- managing Crypto Asset Storage owned by the Customer; and
- transferring Crypto Assets between wallets.
(Art. 13 (2) of BAPPEBTI Regulation 8/2021)
Prior to the commencing its brokerage activities, the relevant Broker must:
- have a paid-up capital of, at least,
IDR 80,000,000,000 (eighty billion Rupiahs ); -
maintain an equity of, at least, 80% of the paid-up capital as referred
in Point 1; - have a minimum organizational structure, which consists of the following divisions: Information Technology Division, Audit Division, Legal Division, Crypto Asset Customer Complaints Division, Client Support Division, and Accounting and Finance Division;
- have an online trading system and/or facility to facilitate the Crypto Asset Physical Market trading that is connected to the Futures Exchange and Futures Clearing House;
- have a set of trading rules;
- have a Standard Operating Procedure;
- have, at least, one employee who is a Certified Information Systems Security Professional (CISSP), or collaborates with institutions that have experts or directly has a cooperation agreement with experts who are CISSPs; and
- have candidates for members of the board of directors, members of the board of commissioners, shareholders, controllers, and/or beneficial owners who have to pass the fit and proper test conducted by BAPPEBTI.
(Art. 14 (1) of BAPPEBTI Regulation 8/2021)
Failure in fulfilling one of the above requirements will result in the imposition of administrative sanctions in the form of cancellation of BAPPEBTI approval. (Art. 48 (3) of BAPPEBTI Regulation 8/2021)
E.
Given the relatively active Crypto Assets exchanges in
With regard to NFT, the large interest in this sector is not yet regulated, but the prevailing regulations on Crypto Assets as explained in this article will prevail in the NFT market activities. NFT marketplace should comply with the licensing requirements applicable in Crypto Assets exchange activities.
This shall prevail as long as the Indonesian government/ BAPPEBTI has not issued any specific regulation concerning NFT.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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