Crypto exchanges in Indonesia have until November 2024 to obtain a Physical Crypto Asset Traders (PFAK) license for its cryptoregulation plans.
Indonesia’s Deadline Extension for Crypto Licenses
The Indonesian Commodity Futures Trading Regulatory Agency, known as Bappebti, has announced a significant extension for crypto exchanges. They now have until late November 2024 to obtain a Physical Crypto Asset Traders (PFAK) license. This decision aims to enhance regulatory compliance within Indonesia’s crypto sector.
Understanding the PFAK License
Bappebti’s Regulation No. 9 of 2024 is the latest update regarding crypto asset regulations. This marks the third amendment since the initial rules were introduced in 2021. The updated regulations transition registered crypto exchanges to fully licensed PFAK status.
More Time for Compliance
This extension allows crypto exchanges additional time to fulfill their licensing obligations. Key requirements include joining the Futures Exchange and the Crypto Futures Clearing House. This decision aims to streamline the licensing process and ensure all exchanges meet the necessary standards.
Industry Response
INDODAX, one of the leading crypto exchanges in Indonesia, supports the extension. CEO Oscar Darmawan emphasized that the additional time allows exchanges to comply with regulations. He noted, “We warmly welcome this decision, as it provides space for more exchangers to fulfill their obligations in accordance with applicable regulations.”
Progress and Challenges
Darmawan also highlighted that INDODAX has made significant progress in the licensing process. They have obtained necessary approvals for exchange and clearinghouse memberships. Currently, they await final validation from Bappebti to complete their licensing journey.
Encouraging Institutional Participation
The new regulations expand participation in Indonesia’s crypto market. Previously, only individuals could trade crypto assets. Now, legal entities and business enterprises are allowed to engage, promoting institutional involvement in the digital asset landscape.
Regulatory Cooperation for Transparency
Bappebti’s new regulations emphasize Know Your Transaction (KYT) standards. Crypto exchanges must cooperate with the Indonesian Directorate General of Population and Civil Registration (Ditjen Dukcapil). These measures ensure transparency and compliance with legal requirements.
Licensing Process Requirements
Aldison, head of Bappebti’s Bureau of Legislation and Enforcement, stated that crypto exchanges must sign agreements with Ditjen Dukcapil. Additionally, all registered exchanges must become members of the Crypto Asset Futures Exchange and Clearing House. This must occur within seven working days of receiving their registration certificate.
Consequences of Non-compliance
Failure to meet these requirements could result in the revocation of registration. This stringent approach emphasizes Bappebti’s commitment to ensuring a well-regulated crypto market in Indonesia.
Successful Licenses
Tokocrypto, a subsidiary of Binance, recently secured its PFAK license. This makes it the third exchange in Indonesia to achieve this status. The platform now boasts over 4.5 million users and experienced a 170% increase in trading volume since 2023.
Binance’s Market Impact
Following Binance’s acquisition of Tokocrypto in December 2022, the platform gained a significant 43% market share in Indonesia. The collaboration also led to a crackdown on crypto fraud, resulting in multiple arrests.
Combating Crypto Fraud
Binance’s Financial Intelligence Unit worked closely with Tokocrypto and Indonesia’s Criminal Investigation Agency, Bareskrim. This partnership aimed to combat crypto fraud, specifically targeting scams like “pig butchering.” This scheme tricks victims into making large investments under false pretenses.
Security Concerns for INDODAX
The push for tighter regulations by INDODAX comes in response to a recent security breach. On September 11, the exchange lost approximately $22 million in digital assets due to hacking. This incident highlighted the need for robust regulatory measures in the crypto space.
Future of Crypto Regulation in Indonesia
As Indonesia moves forward, the extended deadline for crypto exchanges provides a critical opportunity. This allows them to comply with updated regulations and improve transparency. The country’s commitment to a regulated crypto environment signals a positive shift for the industry.
Final Thoughts
The extension of the deadline for obtaining the PFAK license reflects Indonesia’s dedication to regulating its crypto market effectively. As exchanges adapt to these changes, the future looks promising for the country’s digital asset landscape.
Disclaimer:
The information provided on 13Desk is for informational purposes only and should not be considered financial advice. We strongly recommend conducting your own research and consulting with a qualified financial advisor before making any investment decisions. Investing in cryptocurrencies carries risks, and you should only invest what you can afford to lose. 13Desk is not responsible for any financial losses incurred from your investment activities.
