Indonesia Watchdog Blocks Cryptocurrency Lending Platform

Indonesia Watchdog Blocks Cryptocurrency Lending Platform 1

Indonesia’s Financial Services Authority, known as OJK, has identified and blocked almost 300 illegal peer-to-peer lending platforms, which includes one cryptocurrency firm.According to Nikkei, OJK’s investment alert unit joined hands with the IT ministry and local police to launch a crackdown against unlicensed FinTech platforms. The investigations found that most of the unregistered lending platforms had servers located in Indonesia, but a few of them were operating from outside the international borders. Nevertheless, OJK did not reveal the names of sacked entities, particularly the one that was facilitating cryptocurrency loaning between Indonesians.“Once a fintech platform has been verified as illegal, we will directly block it. By blocking these illegal platforms, we hope to protect the consumers and the public,” said Anthonius Malau, acting director of informatics application control at the Indonesian IT ministry.The BackdropThe crackdown follows years of development in the cryptocurrency-enabled lending industry. Unlike the traditional mechanisms, wherein people rely on banking approvals to secure loans, a decentralized financing approach allows people to undergo a short-cycled approach. A borrower can connect to potential lenders via web portals and collect financing in the form of decentralized cryptocurrencies, such as bitcoin, ether, or portal-enabled native tokens.The exercise, albeit seamless, also creates opportunities for fraud. Fintech startups might attract funds from small investors to run P2P lending platforms and go default at later stages, as evident in the many cases arising from another Asian economy China. Certain cryptocurrency platforms, in particular, have a history of disappearing with investors’ money. BitConnect, a cryptocurrency lending platform that was highly active in Indonesia, vanished with about $250 million of funders’ money.

OJK in December 2016 decided to include P2P lending in its financial technology regulation law. The watchdog said that it would license platforms that possess at least 1 billion rupiahs ($75,000) in the capital and 2.5 billion rupiahs (nearly $200,000) to apply for a license to operate. The expensive legal process discouraged many Fintech startups from even seeking an operational license, leading to the formation of an illegal lending industry.

“Fraud will be inevitable, even when there is regulation,” said Aidil Zulkifli, CEO of UangTeman.com, an Indonesian direct online lender. “However, I don’t think that it will be as rife as in China because the Chinese and Indonesian supply-side environments are very different.”

The Crackdown

Tongam Lumban Tobing, chief of the OJK’s investment alert unit, said they so far have blocked 1,369 illegal lending platforms in 2019. Many of them were directly or indirectly working with cryptocurrencies and acted like loan sharks while charging excessive interest rates from unbanked Indonesians.

Last year, the authorities had nabbed 1,773 unlicensed lending platforms.

About the author

E-Crypto News was developed to assist all cryptocurrency investors in developing profitable cryptocurrency portfolios through the provision of timely and much-needed information. Investments in cryptocurrency require a level of detail, sensitivity, and accuracy that isn’t required in any other market and as such, we’ve developed our databases to help fill in information gaps.

Related Posts

E-Crypto News Executive Interviews



bitcoin
Bitcoin (BTC) $ 61,055.00
ethereum
Ethereum (ETH) $ 4,087.14
binance-coin
Binance Coin (BNB) $ 482.34
tether
Tether (USDT) $ 1.00
cardano
Cardano (ADA) $ 2.15
solana
Solana (SOL) $ 195.68
xrp
XRP (XRP) $ 1.09
polkadot
Polkadot (DOT) $ 43.36
dogecoin
Dogecoin (DOGE) $ 0.248062
usd-coin
USD Coin (USDC) $ 0.99995
USD
EUR
GBP
bitcoinBitcoin (BTC)
$ 61,055.00
ethereumEthereum (ETH)
$ 4,087.14
tetherTether (USDT)
$ 1.00
bitcoin-cashBitcoin Cash (BCH)
$ 623.26
litecoinLitecoin (LTC)
$ 195.10
bitcoinBitcoin (BTC)
52.432,51
ethereumEthereum (ETH)
3.509,93
tetherTether (USDT)
0,858775
bitcoin-cashBitcoin Cash (BCH)
535,24
litecoinLitecoin (LTC)
167,55
bitcoinBitcoin (BTC)
44,306.09
ethereumEthereum (ETH)
2,965.94
tetherTether (USDT)
0.725675
bitcoin-cashBitcoin Cash (BCH)
452.28
litecoinLitecoin (LTC)
141.58

Automated trading with HaasBot Crypto Trading Bots

Crypto Scams

Behind The Scenes: How this Crypto Community Responded to + $50m Hack
October 18, 2021
Crypto Scams
Crypto Scams Still Persistent In 2021, SEC Warns About Red Flags To Watch
September 9, 2021
Poly Network
Here’s How Hackers Stole Over $600 million in the Poly Network Attack
August 12, 2021
The World’s Most Infamous Crypto Hacks and Scams
July 31, 2021
Cryptocurrency Exchanges
Cryptocurrency Exchanges and the Plague of Scams and Bans
June 29, 2021

Blockchain/Cryptocurrency Questions and Answers

ICo Presale
The Science Behind ICO Presales…
October 14, 2021
Beginner’s Guide to Investing in Cryptocurrency
August 9, 2021
Short-Sell Cryptocurrency
How to Short-Sell Cryptocurrency: A Brief Overview
July 17, 2021
Klaytn
What Is Klaytn (KLAY) And How Does It Work?
July 16, 2021
Cryptocurrencies
Our Crypto Roundup Interview Asks- Do Cryptocurrencies Have a Future?
July 15, 2021


CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin61,003 0.05 % 0.19 % 1.30 %
Ethereum4,091.5 0.31 % 2.92 % 5.30 %
Binance Coin482.06 0.19 % 0.35 % 1.26 %
Tether0.9986 0.03 % 0.08 % 0.23 %
Cardano2.150 0.25 % 0.53 % 3.35 %
Solana195.53 0.27 % 0.25 % 19.97 %
XRP1.090 0.20 % 0.33 % 5.13 %
Polkadot30.87 2.19 % 17.29 % 10.73 %
Dogecoin0.2480 0.10 % 0.24 % 5.52 %
USD Coin1.000 0.14 % 0.20 % 0.17 %

bitcoin
Bitcoin (BTC) $ 61,055.00
ethereum
Ethereum (ETH) $ 4,087.14
binance-coin
Binance Coin (BNB) $ 482.34
tether
Tether (USDT) $ 1.00
cardano
Cardano (ADA) $ 2.15
solana
Solana (SOL) $ 195.68
xrp
XRP (XRP) $ 1.09
polkadot
Polkadot (DOT) $ 43.36
dogecoin
Dogecoin (DOGE) $ 0.248062
usd-coin
USD Coin (USDC) $ 0.99995