Guide To Avoiding Crypto Coin Fraud Investments

Stupid investment has taken its toll again. This time the type is crypto coin assets. How to avoid fraudulent crypto coin investment traps?

Recently, I read that there has been a fraudulent investment scam using crypto coin instruments. The numbers are quite fantastic and involve people from various circles.

The case has been handled by the Criminal Investigation Agency (Bareskrim) of the National Police which has named the owner of the company as a suspect in fraud, embezzlement, and money laundering on April 22, 2021.

I will not discuss this crypto coin fraud case in detail. You can find the information yourself in various online and print media.

What I want to convey is how we can avoid the trap of crypto coin fraud.

Crypto coins are a new type of asset instrument that is on the rise, so many people are attracted to it.

Lots of news about the benefits of investing in crypto coins makes many people tempted to enter. The problem is, many people don’t really understand what crypto coin assets are.

Here’s how to avoid being trapped in a crypto coin scam:

1. CoFTRA Commodity Crypto

First of all in all investments, not only crypto, we must know the legality. Is there a provision or not.

Is crypto legal in Indonesia?

Yes, but must meet a number of provisions and requirements from the Government.

Legal certainty regarding the legality of buying and selling crypto assets is the regulation of the Minister of Trade and CoFTRA.

Cryptocurrency regulations in Indonesia are under the supervision of the Commodity Futures Trading Regulatory Agency (BAPPEBTI).

The buying and selling of cryptocurrencies, such as Bitcoin and other crypto coins, is legal.

What is not or has not been allowed in Indonesia is to use Bitcoin as a means of payment transactions. In Indonesia people cannot buy anything and pay with Bitcoin.

The rules for buying and selling crypto coins as commodities are contained in:

Regulation of the Minister of Trade Number 99 of 2018 concerning General Policies for the Implementation of Crypto Asset Futures Trading and
Commodity Futures Trading Supervisory Agency Regulation Number 5 of 2019 concerning Technical Provisions for the Implementation of the Crypto Asset Physical Market on the Futures Exchange. This rule was signed on February 8, 2019.

Importantly, even though it is legal, the CoFTRA Regulation stipulates that crypto assets that are legal and can be traded in Indonesia must meet the following requirements:

based on distributed ledger technology ;
utility crypto assets or
asset- backed crypto assets and
has a market capitalization value , is ranked in the top 500 crypto asset market capitalization, is entered in the transactions of the world’s largest crypto asset exchange, and has economic benefits.

When receiving a crypto investment offer, don’t be immediately attracted by the high returns, but first make sure that the crypto coin meets the above requirements.

Fraudulent crypto coins that are fraudulent and have now been handled by Bareskrim are types of crypto coins that do not meet the requirements of CoFTRA above.

2. Crypto Company

CoFTRA regulations regulate crypto exchanges.

Exchange is a company that manages a place for investors to sell, buy, store (rupiah or coins) and transfer crypto assets. Exchange security and regulation is very important for investors.

CoFTRA’s regulations stipulate that:

First , a Physical Crypto Asset Trader is a party that has obtained approval from the Head of CoFTRA to conduct Crypto Asset transactions either on their own behalf, and/or facilitate Crypto Asset Customer transactions.

Second , the exchange must apply for registration with CoFTRA as a “Prospective Physical Crypto Asset Trader”, by fulfilling the following conditions:

paid up initial capital of Rp 100 billion
maintain a final capital balance of Rp 80 billion.
provide the necessary documents,
provide system access to BAPPEBTI (read only), as well as
submit periodic reports on the implementation of cryptocurrency trading.

Third , CoFTRA gives a maximum time of 1 year from the time the registration certificate is given to each “Prospective Crypto Asset Physical Trader” company to become a “Crypto Asset Physical Trader”, by fulfilling a number of requirements.

One of the requirements to become a “Physical Crypto Asset Trader” is that the capital must increase to IDR 1 Trillion from the previous IDR 100 Billion. There was a 10x increase in capital.

Fourth , if within 1 year, the “Prospective Crypto Asset Physical Trader” fails to comply with the provisions of CoFTRA, the failed company must be dissolved and its assets transferred to another company.

The following is an excerpt from the CoFTRA Regulation that “Prospective Crypto Asset Physical Traders whose registration is canceled must:

transfer the Crypto Asset Customers, funds, and Crypto Assets belonging to the Crypto Asset Customers to prospective Crypto Asset Physical Traders who have obtained registration marks or Crypto Asset Physical Traders who have obtained approval; or
return funds and/or hand over the Crypto Assets belonging to the Crypto Asset Customers that it manages, and are prohibited from accepting new Crypto Asset Customers.”

At this time, CoFTRA has issued registration marks to 13 companies as “Prospective Physical Crypto Asset Traders”. These 13 companies are officially and legally allowed to conduct crypto asset transactions in Indonesia.

You can see here: List of Crypto Asset Companies Authorized by CoFTRA .

When an offer to invest in crypto coins comes, we have to make sure that the legal entity or company that offers it is officially registered with CoFTRA. We really have to check the legality of this.

Crypto coin bogus investment scams that occurred recently were carried out by companies that were not registered with CoFTRA.

3. Crypto Asset List

Currently, there are many types of crypto coins circulating in the world robot tranding binance. The famous ones are Bitcoin and Ethereum, but beyond that there are tons of other crypto assets.

Indeed, the feature of cryptocurrency is that it can be created by anyone. There is no limit, only certain institutions can make it.

In contrast to money coins that can only be issued and circulated by the government of a country.

To anticipate this, CoFTRA issued a regulation that crypto coins must be included in the 229 types of crypto assets traded on the physical crypto asset market as stipulated in the Commodity Futures Trading Regulatory Agency Regulation Number 7 of 2020.

The crypto coins that entered the fraudulent investment were not included in the list of 229 types of crypto assets from CoFTRA.

Crypto Coin Investment Tips

It’s natural to be interested in investing in crypto coins – it’s natural. However, because this is a new instrument, my advice is to do the following so as not to get caught in a fraudulent investment:

1. Comply with CoFTRA Regulations

We must ensure that crypto coin investments meet all the requirements of CoFTRA as a regulatory agency for crypto transactions in Indonesia.

Types of crypto coins must meet the requirements
Transactions in companies registered with CoFTRA . Currently there are only 13 companies
Included in the list of 229 types of crypto assets that have been stipulated in the Commodity Futures Trading Regulatory Agency Regulation Number 7 of 2020.

2. Avoid Investment Promises Fixed Profits

One of the characteristics of fraudulent investment is that it promises not only high profits, but also fixed income.

High returns are normal. Many investment instruments that can provide high returns.

However, a high return, followed by a high risk as well. Known in financial law as “high risk high return”.

The problem is, an instrument that promises a fixed return on fixed income is an investment that has a low risk. Because, the results are definitely obtained.

Therefore, high returns with fixed profits are impossible in investment.

If anyone dares to offer high returns and fixed profits, it will definitely only last for a while and use a pyramid scheme (ponzi).

3. Scheme Pyramid (Ponzi)

Fraud investing is usually synonymous with pyramid or Ponzi schemes.

Stupid investment will recruit new members using a pyramid scheme, namely by producing and trading coins among its own members.

A normal and healthy business is growing based on sales or investment returns, while Ponzi schemes grow from membership fees and later when the number of people invited to join runs out or decreases, the Ponzi scheme will collapse.

That’s why one of the main characters of Ponzi is focused on finding new members and not selling products.

Crypto coin fraud, according to CoFTRA, is a Ponzi scheme. CoFTRA’s press release on March 30, 2020 stated that fraudulent investment companies recruited new members using a pyramid scheme, namely by producing and trading coins among their own members.

4. Check the Investment Alert Task Force

OJK cooperates with other law enforcement institutions in the Investment Alert Task Force. The result of collaboration with several related institutions: the Financial Services Authority; Ministry of Trade of the Republic of Indonesia; Capital Investment Coordinating Board; Ministry of Cooperatives and Small and Medium Enterprises of the Republic of Indonesia; Ministry of Communication and Information of the Republic of Indonesia; Prosecutor’s Office of the Republic of Indonesia and the State Police of the Republic of Indonesia.

The Investment Alert Task Force (SWI) takes decisive actions in the form of:

Announce fraudulent investments to the public
Cut off financial access to fraudulent investments in banking and fintech payment systems in collaboration with Bank Indonesia
Submitting to block websites and applications regularly to the Ministry of Communication and Information of the Republic of Indonesia
Submit a report to the Criminal Investigation Police for the law enforcement process

Periodically, the Investment Alert Task Force announces a list of fraudulent investments and illegal P2P fintech to the public.

The goal is that the public does not use this illegal service and if offered it can refuse or even report the existence of illegal fintech to the Task Force for follow-up.

When receiving a crypto investment offer, don’t be immediately attracted by the high return, but make sure first that fake investment offers are not included in the list of fraudulent investments issued by the Investment Alert Task Force.


The emergence of fraudulent investment cases under the guise of crypto coins caused no small losses in society. Let the authorities act according to the applicable law.

For us as potential investors, the important thing is to ensure that we don’t get caught up in fraudulent investments, especially crypto, which is currently on the rise because of the lure of fantastic returns.

Author: Admin