Cryptoassets: how are they traded in Indonesia? BAPPEBTI has its say | Hogan Lovells

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[co-author: Fakharsyah Hanif Sugiyartomo]

The global emergence of crypto-currencies has not escaped the notice of the Indonesian government, which has announced its intention to regulate transactions in crypto-assets. As the competent authority to oversee commodities in future transactions, the Indonesian Commodity Futures Trading Regulatory Agency (BAPPEBTI) issued Regulation No. 8 of 2021 regarding guidelines for trading in commodities. crypto-assets on the futures markets (regulation 8/2021). We highlight several key points of the regulation that you should note

Types of crypto-assets

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

should be based on distributed ledger technology; must be in the form of utility or crypto-backed crypto assets; and obtained the result of the evaluation of BAPPEBTI using the Analytical Hierarchy Process (AHP).

The AHP cryptoassets assessment conducted by BAPPEBTI is based on several considerations such as; the market capitalization of crypto-assets; recognition of crypto-assets in global 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 that can be traded on a future market overseen by BAPPEBTI. To date, BAPPEBTI has announced 229 types of crypto-assets eligible for trading in Indonesia, such as Bitcoin, Ethereum, Tether, and Doge Coin.

Crypto-asset trading

Trading of a crypto asset can only be done electronically by traders of crypto assets in a future market as approved by BAPPEBTI. In order to provide crypto-asset exchanges in the future market, the crypto-asset trader must meet several requirements, including: a minimum paid-up capital of IDR 80,000,000,000 (approximately US $ 5.6 million); keep at least 80% of the equity of the total paid-up capital; an established (i) information technology division, (ii) an audit division, (iii) a legal division, (iv) a customer service division, (v) a customer support division and (vi) an accounting and finance division in its corporate structure and established business rules. Once these requirements have been met and the crypto-asset trader has obtained approval from BAPPEBTI to operate, the crypto-asset trader can facilitate the following crypto-asset transactions:

sale and purchase of Indonesian rupiah crypto-assets; trading between one or more types of crypto-assets; storage of crypto-assets belonging to the subscriber of crypto-assets; and the transfer or disposal of crypto-assets between portfolios.

The transaction of a crypto-asset must be carried out in a crypto-asset subscription contract that includes at least (i) the profile of the crypto-asset trader, (ii) the potential risk of the crypto transaction, and (iii ) trading rules as determined by the crypto-asset trader. The subscriber to crypto-assets must be a natural person aged 17 or over, have an identity card and / or citizen passport and subscribe to crypto-assets with 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) quarterly and annual business activity reports. base of BAPPEBTI, and (iii) any periodic and incident reports as required by BAPPEBTI. In the meantime, any change in management, address, corporate name, shareholding, IT system or trading rules must also be approved by BAPPEBTI.

Besides 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. Material for such programs must be submitted to BAPPEBTI no later than five days before such event.

Any crypto-asset trader who does not comply with the above obligations will be exposed to several administrative penalties in the form of written warnings, suspension of trading activity and / or revocation of the crypto-trader’s registration. active.

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