Crypto-Assets: How Are They Traded In Indonesia? BAPPEBTI Has Its Say.

Regulation 8/2021 provides that crypto-assets to be traded in Indonesia;

1. should be based on distributed ledger technology;
2. must be in a form of utility crypto or crypto-backed assets; and
3. have obtained assessment result from BAPPEBTI using the Analytical Hierarchy Process (AHP).

The AHP assessment of crypto-assets conducted by BAPPEBTI are based on several considerations such as; the market cap of the crypto-assets; acknowledgement of the crypto-assets in worldwide transactions; and the economic and risk value of the crypto-asset. In Indonesia, crypto-assets have not yet been recognized as a currency, but rather as assets which can be traded in a future market supervised by BAPPEBTI. As of now, BAPPEBTI has announced 229 types of crypto-assets which are eligible for trading in Indonesia, such as Bitcoin, Ethereum, Tether, and Doge Coin.

Trading of Crypto-assets

Trading of a crypto-asset may only be conducted electronically by crypto-asset traders in a future market as approved by BAPPEBTI. In order to provide crypto-asset trading in the future market, the crypto-asset trader must satisfy several requirements, including; a minimum paid-up capital of IDR80,000,000,000 (approx. US$5.6m); retaining at least 80% equity of the total paid-up capital; an established (i) information technology division, (ii) audit division, (iii) legal division, (iv) customer service division, (v) client support division and (vi) accounting and finance division in its company structure and established trading rules. Once these requirements have been satisfied and the crypto-asset trader has obtained approval from BAPPEBTI to conduct business, the crypto-asset trader can facilitate the following crypto-asset transactions:

1. sale and purchase of crypto-assets using Indonesian Rupiah;
2. trading between one or more type of crypto-asset;
3. storage of crypto-assets owned by the crypto-asset subscriber; and
4. transfer or assignment of crypto-assets between wallets.

The transaction of a crypto-asset must be made in a crypto-asset subscription agreement which consists of at least (i) the profile of the crypto-assets trader, (ii) potential risk of the crypto transaction, and (iii) trading rules as determined by the crypto-asset trader. The crypto-asset subscriber must be an individual aged 17 or above, have a citizen ID card and/or passport and subscribe to the crypto-assets using their own funds. The crypto-asset transaction must be reported to BAPPEBTI on a daily and monthly basis by the crypto-asset trader.

Supervision and Sanction

In addition to the obligation to report crypto-asset transactions as mentioned above, a crypto-asset trader is also required to submit (i) financial reports on a daily, monthly and annual basis, (ii) business activity reports on a quarterly and annual basis to BAPPEBTI, and (iii) any periodical and incidental reports as required by BAPPEBTI. Meanwhile, any changes to the management, address, company name, share ownership, IT system or trading rules must also be approved by BAPPEBTI.

Other than the reporting obligation as mentioned above, a crypto-asset trader is also required to organize explanatory and educational activities in the form of a seminar, workshop, promotion, training, etc. regarding crypto-asset trading. The materials for such programs must be submitted to BAPPEBTI by no later than five days prior to such event.

Any crypto-asset trader that fails to satisfy the above obligations shall be subject to several administrative sanctions in the form of written warnings, suspension of business activity, and/or revocation of crypto-asset trader registration.