Legal Status of Cryptocurrency in Indonesia and Legal Analysis of the Business Activities in Terms of Cryptocurrency
DOI:
https://doi.org/10.21776/ub.blj.2019.006.01.06Keywords:
virtual currency, cryptocurrency, digital currency, bitcoin, fintechAbstract
Indonesia's recent development in legal policy toward cryptocurrency is pertinent to ask whether this new investment market has any more risk to throw over Indonesia than how to protect the existing variable parties by overall structural formation. This tendency has prevented the government to implement the machinery of more fundamental keynote of policy. Against this backdrops, this research first analyzes the existing laws and regulations to examine the current legal status of virtual currency in Indonesia with the method of conceptual analysis. Despite the Government's skeptical stance about economic soundness that cryptocurrency market leads, however, how to protect the various parties in the existing market is a different issue which still needs an urgent attention from policy makers, legal practitioners, judiciary and academic researchers. Therefore, this paper further studies the relevant laws and regulations governing the actual operation of cryptocurrency exchange in Indonesia to discuss the more practical aspects by interviewing an Indonesian cryptocurrency exchange and professional lawyers at Dentons HPRP. Subsequently, the most worrisome legal risks in the industry are diagnosed by interviewing a global cryptocurrency exchanges. This study concludes that BAPPEBTI Regulation No. 5 of 2019 cannot be the good answer to minimize the risk and will only harm bona fide market participants without a good-standing authority.
References
Books
Chang, Soonpeel Edgar, Indonesian Company Law (Routledge, 2018)
Peukert, Alexander, Goods allocation as a legal principle XXII, (Jus Privatum, 2008)
Journals Articles
Barsan, Iris, ‘Legal Challenges of Initial Coin Offerings (ICO)’ (2017) 3 Revue Trimestrielle de Droit Financier (RTDF).
Harjono, Dhaniswara K., ‘Pengaruh Sistem Hukum Common Law Terhadap Hukum Investasi Dan Pembiayaan Di Indonesia’ (2009) 6(3, Agustus) Lex Jurnalica, 180.
Parisi, Francesco, ‘The Fall and Rise of Functional Property’ (2005) November George Mason Law & Economics Research Paper No. 05-38.
Sam, Lee Weon, ‘Understanding and Legal Status of Virtual Currency – Focusing on Bitoin’, (2018) 31(2) The Korea Commercial Cases Association, Commercial Cases Review.
Sjef van Erp, ‘A Numerus Quasi-Clausus of Property Rights As A Constitutive Element of A Future European Property Law?’ (2003) 7(2, June) Netherlands Comparative Law Association, Nedelandse Vereniging Voor Rechtsvergelijking.
Soerdojo SH., MSI, Dr. Irawan, ‘The Development of Indonesian Civil Law’ (2016) IV(Issue IX. September), Scientific Research Journal.
Wook, Bae Seung, ‘A study on the Establishment of Virtual Currency Legal System’ (2018) Foreign Language College of Korea, Doctorate theses.
Yusuf, Fahrul S and Harry Kuswara, ‘Weighing the future’ (2018) International Financial Law Review, 16 July 2018.
Legislations and other Legal Document
Indonesian Civil Code
Japanese Civil Code
South Korean Civil Code
Bappebti Regulation No. 2 of 2016
Bank Indonesia Regulation. No. 18/40/PBI/2016 concerning the Implementation of Payment Transaction Processing
Bank Indonesia Regulation. No.19/10/PBI/2017 Fithri Hadi Direktur Inovasi Keuangan Digital OJK.
Communication Department of Bank Indonesia, Bank Indonesia Warns All Parties Not to Sell, Buy, or Trade Virtual Currency, 13 January 2018.
FCA, “Initial Coin Offeringsâ€, United Kingdom FCA Statements, 12 September 2017.
Financial Crimes Enforcement Network, “Application of Fin CEN’s Regulations to Persons Administering, Exchanging or Using Virtual Currencies,†FIN-2013-G001, 18 March 2013.
Financial Action Task Force, “Virtual Currencies – Key Definitions and Potential AML/ CFT Risksâ€, Financial Action Task Force Report, 2014. 6.
FINMA, “Regulatory treatment of initial coin offeringsâ€, FINMA Guidance 04/2017, 2017.9.29)
Indonesian Ministry of Finance, Warning Against the Use of Virtual Currency in Indonesia, 22 January 2018.
New York Code Rules and Regulations, Title. 23 sec. 200.4~200.20.
President Regulation No.13 of 2018 on the Implementation of the Principle of Knowing Beneficial Owners of Corporation in Relation to the Prevention and Eradication of Money Laundering and Terrorism Financing Crimes
Regulation of the Conduct of Virtual Currency Business, 37 N.Y. Reg., June 24, 2015, Art. 200.2(p).
Regulation of the Indonesian Ministry of Trade No.99/2018 concerning Future Trade of Crypto Asset.
SEC, “Release No.81207; Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAOâ€, July 25, 2017.
Pusat Pelaporan dan Analisis Transaksi Keuangan, Beware of the Use of Virtual Currency, 12 February 2018.
OJK, Press Release: Investment Alert Task Force Suspends 14 Business Activities to Protect Public, 23 Oct 2017. https://www.ojk.go.id/en/berita-dan-kegiatan/siaran-pers/Pages/Press-Release-Investment-Alert-Task-Force-Suspends-14-Business-Activities-to-Protect-Public.aspx assessed on 7 August 2018
OJK Regulation No.77/POJK.01/2016 concerning P2P Lending
Law No.19/2011 concerning Commodity Futures Trade (amendment of Law No.32/1997 concerning Future Commodity).
Rechtbank Amsterdam, ECLI:NL:RBAMS:2018:869. C/13/642655.
Internet Sources
Dwivedi, Shubham, South East Asia: The State of Crypto and ICO regulation (23 June 2018) Koinalert. <https://www.koinalert.com/south-east-asia-the-state-of-crypto-and-ico-regulation/> assessed on 13 August 2018
Kim, Dahee, South Korean cryptocurrency executives detained over alleged embezzlement (5 April 2018) Thomson Reuters <https://www.reuters.com/article/us-crypto-currencies-southkorea-arrests/south-korean-cryptocurrency-executives-detained-over-alleged-embezzlement-idUSKCN1HC07D> accessed on 14 August 2018.
M, Krystle, New Crypto Futures Rules by Indonesia’s BAPPEBTI Poorly Received by Traders (February 14, 2019) Bitcoin Exchange Guide
Memoria, Francisco, TRON Enters Indonesia as Local Exchange Indodax Adds TRX/IDR Trading Pair (3 June 2018) Cryptoglobe, <https://www.cryptoglobe.com/latest/ 2018/06/tron-enters-indonesia-as-local-crypto-exchange-indodax-adds-trx-idr-trading-pair/> assessed on 13 August 2018.
Nakamoto, Satoshi, Bitcoin: A Peer-to-Peer Electronic Cash System (2008)
Normala, Adinda, OJK Warns of New Cryptocurrency-Based Investment (26 January 2018) Jakarta Globe.
Putra, Nanda Narendra, Risiko Jual-Beli Bitcoin Tidak Dijamin Otoritas Manapun (13 Jan 2018) Hukum Online.
Rahayu, Sri and Indriana Pramestri, Fintech 2018 Indonesia, (21 May 2018) International Comparative Legal Guides, <https://iclg.com/practice-areas/fintech-laws-and-regulations/indonesia> assessed on 10 August 2018.
Rana, Aakanksha, Dash, NEM [XEM], Dogecoin [DOGE], and Bitshares [BTS] now available on Indodax, (25 July 2018) AMBCrypto, <https://ambcrypto.com/dashnem-xem-dogecoin-doge-and-bitshared-bts-now-available-on-indodax-for-trading/> assessed on 7 August 2018.
Safitri, Dita, Bappebti Segera Rilis Aturan Aset Digital (29 April 2018) Dunia Fintech <https://www.duniafintech.com/bappebti-rilis-aturan-aset-digital/> accessed on 14 August 2018
Woo, Wilma, Russia: Court Rules Bitcoin is Property in Landmark Bankruptcy Case (8 May 2018) Bitcoinist. <http://bitcoinist.com/russian-court-rules-bitcoin-property/> accessed on 14 August 2018.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2019 Brawijaya Law Journal : Journal of Legal Studies
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
