Indonesia’s OJK has Prohibited Financial Service Providers from Supporting Cryptocurrency Trading

Indonesia’s Financial Services Authority (OJK) recently announced that they’re strictly prohibiting the nation’s financial services providers from marketing or facilitating the trading of cryptocurrencies.

The Indonesian regulator has cautioned that the value of virtual currencies are subject to market fluctuations and investors need to be well aware of the potential risks associated before they make investments.

The OJK also mentioned that investors need to be aware of crypto-related investments that are Ponzi schemes or scams. However, the regulator did not elaborate further on these issues.

The regulation and supervision of cryptocurrencies in Indonesia is carried out by the Commodity Futures Trading Supervisory Authority (Bappebti), and not by OJK.

The nation’s Ministry of Trade intends to establish a cryptocurrency exchange by the first quarter of this year. It will be launched via the Digital Futures Exchange (DFX), the third futures exchange operating in the Southeast Asian country.

The Monetary Authority of Singapore (MAS) has also prohibited digital currency  trading platforms from promoting their services in public areas. This, as the regulator believes it could encourage consumers to trade these speculative assets without actually understanding the potential risks involved.

Wimboh Santoso, Chair of the Board of Commissioners at OJK, stated:

“OJK has strictly prohibited financial service institutions from using, marketing, and/or facilitating crypto asset trading,”

Regulators in other jurisdictions have also attempted to place a ban on cryptocurrency trading. Authorities in countries like India and Russia have issued statements over the years that have  instructed local residents not to engage in crypto-related transactions. Lawmakers have also asked local businesses and banking institutions to not work with clients who might be dealing in crypto-assets.

Regulators have expressed concerns about the speculative nature of cryptocurrencies and their highly volatile nature. Consumers have been advised to do their research prior to making investment-related decisions. Despite all these issues, the crypto market has grown steadily over the years and approached the $3 trillion market cap before correcting to below $2 trillion at the time of writing.

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