Crypto Exchanges Face Potential Shutdown In Crypto Dominated Country
In a recent regulatory shift, Indonesia, the pioneer of the world’s first national crypto bourse, the Commodity Future Exchange (CFX), is set to tighten its grip on the burgeoning crypto market. With over 18 million registered cryptocurrency traders, surpassing the 12 million stock traders, the CFX responds to local crypto demand.
Meanwhile, it reflects a strategic government effort to enhance investor safety, monitoring digital asset transactions for tax compliance.
Indonesia Unveils New Regulations For Crypto Exchanges
Indonesia is reshaping its crypto landscape, mandating that all crypto exchanges register with the CFX to continue operations. The CFX, modeled after traditional stock exchanges like NASDAQ, aims to enhance the safety of the crypto ecosystem for investors.
To operate beyond August 17, 2024, approximately 29 crypto exchanges in Indonesia must register with the CFX, according to reports. Meanwhile, the regulatory framework, initiated in 2019 by the Indonesian Commodity Futures Trading Supervisory Agency (Bappebti), requires exchanges to undergo a meticulous authorization process involving self-regulatory organizations (SRO) and Bappebti’s fitness assessment.
According to sources, the CFX serves as a crucial monitoring gateway for the government in Indonesia. Speculations hint at future developments like custodianship for asset storage, liquidity monitoring, and a clearing house for transaction recording to ensure tax compliance.
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Stance On Crypto
Beyond investor protection, government plans indicate a strategic move to track digital asset transactions for tax purposes, signaling a broader regulatory framework for the burgeoning crypto industry. In other words, the CFX registration serves as more than a gateway as it positions the government to closely monitor cryptocurrency transactions for tax purposes. Presently categorized as commodities, crypto assets are subject to Value Added Tax (VAT) and Income Tax (PPh).
However, the looming question arises about the fate of crypto in 2025 when a regulatory overhaul shifts oversight from Bappebti to the Financial Services Authority (OJK), potentially reclassifying crypto as securities. If this occurs, crypto traders might enjoy reduced taxes, signaling a pivotal turning point in Indonesia’s evolving crypto landscape.
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