Indonesian Crypto Exchanges Granted Extension for PFAK License Compliance by Bappebti
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Loading... - Bojing Liu
- 23 Oct 2024
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The Indonesian Commodity Futures Trading Regulatory Agency (Bappebti) has announced an extension for local crypto exchanges to comply with the requirements for obtaining a Physical Crypto Asset Traders (PFAK) license. Under Bappebti Regulation No. 9 of 2024, these exchanges now have until the final week of November 2024 to align with the updated regulatory framework.
This latest regulation represents the third amendment to Bappebti’s rules governing physical market trading for crypto assets since their introduction in 2021. It signifies a significant shift towards enhancing oversight and compliance within Indonesia's growing crypto sector.
To transition from provisional CPFAK status to fully licensed PFAK status, crypto exchanges must adhere to stringent requirements, including membership in the Futures Exchange and the Crypto Futures Clearing House.
INDODAX, a prominent player in Indonesia’s crypto landscape, has welcomed this regulatory extension. CEO Oscar Darmawan expressed optimism, viewing the additional timeframe as a crucial opportunity for exchanges to effectively fulfill their regulatory obligations. He confirmed that INDODAX is making progress in securing the necessary approvals for exchange and clearinghouse memberships and is awaiting final validation from Bappebti.
The regulatory amendments not only extend the compliance period but also broaden the scope of participation within the crypto market. Legal entities and businesses are now encouraged to engage in crypto asset trading, which is expected to drive increased institutional involvement in Indonesia’s expanding digital asset ecosystem.
The new guidelines emphasize transparency and regulatory compliance, mandating Know Your Transaction (KYT) standards and collaboration agreements with the Indonesian Directorate General of Population and Civil Registration (Ditjen Dukcapil). According to Aldison, Head of Bappebti’s Bureau of Legislation and Enforcement, the enforcement of these measures is critical, requiring timely agreements with Ditjen Dukcapil and prompt membership in the Crypto Asset Futures Exchange and the Crypto Asset Clearing House.
In a notable development, Tokocrypto, a subsidiary of Binance, recently secured a coveted PFAK license from Bappebti, making it the third certified exchange in Indonesia. Tokocrypto has seen its user base exceed 4.5 million, with a remarkable 170% surge in trading volume since 2023, highlighting its growing prominence in the market. Following Binance’s acquisition of Tokocrypto in late 2022, the conglomerate now commands a substantial 43% share of Indonesia’s crypto market.
Additionally, Binance’s Financial Intelligence Unit (FIU) and Tokocrypto have collaborated with Indonesia’s Criminal Investigation Agency (Bareskrim) to combat crypto fraud activities, leading to arrests and the recovery of illicit funds.
The diligent regulatory efforts within Indonesia’s crypto landscape reflect a concerted push towards creating a secure and compliant environment aimed at safeguarding investor interests and fostering sustainable market growth. For INDODAX, the pursuit of stringent regulation follows a security breach in September, which resulted in the misappropriation of approximately $22 million in digital assets.
As Indonesia continues to navigate the complexities of the crypto market, these regulatory developments are crucial for establishing a robust framework that supports innovation while ensuring the protection of investors and the integrity of the financial system.
