New Rules Require Crypto Exchange Executives to Reside in Indonesia

Summary

Deputy Trade Minister Jerry Sambuaga said that the rapid development in cryptocurrencies over the past two years requires regulatory control that prioritizes community protection, business certainty for business players, and the development of global blockchain transformation. The Trade Ministry is preparing a regulation that requires two-thirds of the board of directors and commissioners to be Indonesian citizens and reside in Indonesia.

"We don't want to give crypto exchange permits carelessly, so only those who are qualified and credible [are allowed]," Jerry said as quoted by Reuters on Wednesday. The Commodity Futures Trading Regulatory Agency (Bappebti) will issue the regulation soon. The new rules will also require companies to use third parties (custodians) to store investor funds and prohibit crypto exchanges from reinvesting the stored assets.

In a hearing with parliament, Bappebti’s Acting Head Didid Noordiatmoko said requiring two-thirds of the board to be Indonesian citizens will prevent them from escaping when problems arise. "[This rule] can prevent top management from running away when problems hit the exchange," he said.

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