Legal Updates for August 2022

Indonesian Crypto Regulator Hits the Brake on the Issuance of Crypto Exchanger Permits

It is no longer a secret that the global crypto industry is experiencing what some commentators have dubbed a "Crypto Winter", a phenomenon where crypto asset prices drop and stay low for a prolonged period. Indonesia is not an exception. Recently, we heard of one registered Indonesian crypto exchanger (referred to as a physical crypto asset broker (pedagang fisik aset kripto) under Indonesian law) that was experiencing a shortage of liquidity when the crypto market started to turn, which led to such crypto exchanger temporarily freezing its users’ wallet.

In light of this recent situation, the Indonesian crypto regulator (the Commodity Futures Trading Regulatory Agency or "Bappebti") has introduced a moratorium on the registration of new crypto exchanger candidates under Circular Letter No. 208/BAPPEBTI/SE/08/2022 ("Circular"), issued by the Head of Bappebti on 15 August 2022.

OJK Tightens Supervision in New Peer-to-Peer Lending Regulation

In July 2022, Indonesia’s Financial Services Authority or OJK (Otoritas Jasa Keuangan) introduced a new regulation on peer-to-peer or P2P lending designed to both encourage optimal and healthy growth of the P2P lending industry and accommodate OJK’s needs for effective and efficient supervision.

Previously, P2P lending in Indonesia was primarily regulated under OJK Regulation No. 77/POJK.01/2016 ("Previous Regulation"). Many view the Previous Regulation as inadequate, especially in light of the rapid growth of P2P lending in Indonesia, which unfortunately also led to an increase in the number of illegal P2P lenders. As of October 2021, OJK had identified more than 100 illegal digital P2P lenders.

The new regulation, OJK Regulation No. 10/POJK.05/2022 on Information Technology-Based Collective Financing Services ("New Regulation"), enacted on 4 July 2022, introduced several new concepts in the P2P lending sector, enhanced the provisions on OJK's supervision through market conduct, and revoked several provisions in the Previous Regulation on the lending limit, paid-up capital and equity minimum requirements, and licensing process. Despite revoking these provisions in the Previous Regulation, clients should note that the implementing regulation for the Previous Regulation, namely OJK Circular Letter No. 18/SEOJK.02/2017, remains valid.

This Update takes a closer look at the changes introduced by the New Regulation.