Regulatory Framework for Cryptocurrency in Indonesia
Approval Requirements
To operate a crypto business in Indonesia, businesses must meet specific requirements. Here are some key points:
- A cooperation agreement is required with an institution that has experts certified as Certified Information Systems Security Professional (CISSP).
- Certain individuals holding positions such as board members, shareholders, and controllers must pass a fit-and-proper test conducted by Bappebti.
Anti-Money Laundering (AML) Requirements
Businesses dealing in cryptocurrency are required to implement AML programs, which include:
- Appointing a money laundering reporting officer
- Conducting risk assessments
- Developing internal policies
- Conducting customer due diligence
- Performing sanctions screening
- Carrying out transaction monitoring
- Complying with the Travel Rule
- Keeping records
- Reporting suspicious activities
Customer Due Diligence
Customer due diligence involves collecting and verifying information about customers during onboarding and assessing risks associated with it. For natural persons, this includes:
- Name
- Address
- Date of birth
- Citizenship
- Employment details
- Gender
- Signature or biometric data
For legal entities, the required documents include:
- Name
- License number
- Line of business
- Domicile address
- Telephone number
- Place and date of incorporation
- Form of legal entity
- Names of board directors/commissioners/shareholders
- Information about authorized natural persons
Penalties for Non-Compliance
Non-compliance with crypto regulations in Indonesia can result in administrative sanctions (fines and imprisonment).
Travel Rule
Indonesia adopted the Travel Rule, which requires obtaining information from senders for transactions above a certain threshold (USD 1,000) including:
- Name
- Wallet address
- Identity card or passport
- Sender’s address
For recipients, the required information includes:
- Name
- Wallet address
- Recipient’s address
Frequently Asked Questions (FAQs)
- Is cryptocurrency legal in Indonesia? Yes, but it can only be traded as a commodity, not accepted as a payment instrument.
- Are there taxes imposed on crypto transactions? Yes, VAT and income taxes are imposed on crypto transactions.
- Which authority regulates cryptocurrency in Indonesia? Bappebti will transfer its authority to OJK by January 2025.
The regulatory framework for cryptocurrency in Indonesia is subject to change, so it’s essential to stay updated with the latest regulations and guidelines.