Foreign investors in Indonesia should be aware of uncertainty in regulations governing Indonesia’s financial services regime and its record in enforcing money laundering prosecutions. Indonesian authorities recently use money laundering and cyber-fraud laws to prosecute companies allegedly involved in illegal investment in relation to peer-to-peer lending and digital trading platforms. This case has generated public attention and has pushed Indonesian law enforcement to use money-laundering laws to fill gaps in Indonesia’s financial crime legislation. Businesses and foreign investors must take this as their cue to enhance their antimoney laundering (AML) due diligence and compliance in order to minimize the potential risk of becoming involved in financial crimes and fraudulent activities associated with fintech/digital investments and subsequent prosecutions. The trend of using online platforms for investment and borrowing money (e.g., digital assets, online trading apps, peer-to-peer lending) has successfully lured thousands of Indonesian financial-service consumers into the digital finance market.
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