Regulating Beneficial Ownership: Unveiling Hidden Assets from Illicit Financial Flows via Cryptocurrency Exchanges in Indonesia
Article Sidebar
Main Article Content
Abstract
This article investigates Indonesia's regulatory challenges and opportunities, such as tracing and recovering assets derived from corruption and laundering them through cryptocurrency, specifically via cryptocurrency exchanges. Cryptocurrency exchange platforms typically implement Know Your Customer and Anti-Money Laundering measures; this study reveals how corrupt actors exploit loopholes in identity verification and transaction monitoring using nominee structures and complex layering schemes. Building upon Indonesia's evolving anti-corruption and Anti Money Laundering legal framework—from the early emergency laws to the establishment of the Corruption Eradication Commission and the Financial Transaction Reports and Analysis Center, culminating in Law No. 8/2010 and the Presidential Regulation on beneficial ownership–the paper critically analyzes the effectiveness of current mechanisms for identifying and disclosing ultimate beneficial owners in crypto-related transactions. This article highlights the vulnerability of cryptocurrency exchanges in facilitating asset concealment under the guise of legitimacy. This article recommends enhanced regulatory alignment, increased transparency in beneficial ownership registries, and institutional capacity building to ensure more effective detection, deterrence, and recovery of illicit assets flowing through cryptocurrency exchanges.
Downloads
Article Details
Section
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
CESIÓN DE DERECHOS, DECLARACIÓN DE CONFLICTO DE INTERESES Y DIFUSIÓN
Los autores/as que publiquen en esta revista aceptan las siguientes condiciones:
- Los autores ceden a la Foro: Revista de Derecho, el derecho de la primera publicación. Las obras se publican en la edición electrónica e impresa de la revista bajo una Licencia Creative Commons 4.0 de Reconocimiento No Comercial-Compartir Igual 4.0, que habilita a compartir, adaptar y atribuir el trabajo (ver: Políticas de acceso abierto).
- Ver información completa de cesión de derechos, declaración de conflicto de intereses y difusión, aquí
How to Cite
References
Ahunu, Linda. “Ghana’s Beneficial Ownership Intervention”. Africa Centre for Energy Policy. 2018, 19-28. https://www.jstor.org/stable/resrep31184.5.
Alhakim, Abdurrakhman, and Tantimin. “The Legal Status of Cryptocurrency and Its Implications for Money Laundering in Indonesia”. Padjadjaran Jurnal Ilmu Hukum 11, n.º 2 (2024): 231-53. https://doi.org/10.22304/pjih.v11n2.a4. DOI: https://doi.org/10.22304/pjih.v11n2.a4
Angélico, Fabiano, and Lígia Zagato. “Beneficial Ownership Transparency in Brazil”.
Transparency International (2017): 19. http://www.jstor.com/stable/resrep20590.8.
Benson, Vladlena, Umut Turksen, and Bogdan Adamyk. “Dark Side of Decentralised Finance: A Call for Enhanced AML Regulation Based on Use Cases of Illicit Acti- vities”. Journal of Financial Regulation and Compliance 32, n.º 1 (2024): 80-97. https://doi.org/10.1108/JFRC-04-2023-0065. DOI: https://doi.org/10.1108/JFRC-04-2023-0065
Buku, Mercy. “Beneficial Ownership: Improving Financial Transparency to Combat Crime and Corruption”. Global Center on Cooperative Security. 2022, 2-14. https:// www.jstor.org/stable/resrep41528.
Carlisle, David. “Money Laundering Through DEXs and Mixers”, 2022. https://www. elliptic.co/blog/money-laundering-through-dexs-and-mixers.
Coinbase. “What Is a DEX?”, 2022. https://www.coinbase.com/learn/crypto-basics/ what-is-a-dex.
“Crypto Crime Trends from Chainalysis”, 2024. https://www.chainalysis.com/ blog/2024-crypto-crime-report-introduction/.
Ergo. “CEX vs DEX: What Are Differences? | Ergo Platform”, 2021.
Europol. “Cryptocurrencies: Tracing the Evolution of Criminal Finances”. Europol (2021): 20. https://www.europol.europa.eu/cms/sites/default/files/documents/Eu- ropol%20Spotlight%20-%20Cryptocurrencies%20-%20Tracing%20the%20evolu- tion%20of%20criminal%20finances.pdf.
Financial Action Task Force (FATF). Beneficial Ownership and Transparency of Legal Arrangements. Paris: FATF / OECD, 2024. https://www.fatf-gafi.org.
---. Beneficial Ownership of Legal Persons. Paris: FATF / OECD, 2023. https://www. fatf-gafi.org.
---. International Standards on Combating Money Laundering and the Financing of Te- rrorism & Proliferation: The FATF Recommendations. Paris: FATF / OECD, 2012; updated 2023. https://www.fatf-gafi.org/content/dam/fatf-gafi/recommendations/ FATF%20Recommendations%202012.pdf.coredownload.inline.pdf.
---. Transparency and Beneficial Ownership. Paris: FATF / OECD, 2014. https://www. fatf-gafi.org/content/dam/fatf-gafi/guidance/Guidance-transparency-beneficial-ow- nership.pdf.
Financial Action Task Force (FATF)-Egmont Group. Concealment of Beneficial Ow- nership. Paris: Financial Action Task Force, 2018. https://www.fatf-gafi.org/media/ fatf/documents/reports/FATF-Egmont-Concealment-beneficial-ownership.pdf.
Földes, Ádám. Maggie Murphy, Maíra Martini and Deborah Unger. “Where Is Bene- ficial Ownership Relevant?”. Transparency International (2017): 4-7. http://www. jstor.com/stable/resrep20573.4.
Forstater, Maya, Michael G. Findley, Jodi Vittori, Yaya J. Fanusie and Miles Kahler. “Council on Foreign Relations Report Part Author (s): Miles Kahler Countering Illicit Financial Flows: Expanding Agenda, Fragmented Governance”. 2018, 0-11.
George, Benedict. “Centralized Exchange (CEX) vs. Decentralized Exchange (DEX): What’s the Difference?”. 2022. https://www.coindesk.com/learn/centralized-ex- change-cex-vs-decentralized-exchange-dex-whats-the-difference/.
Global Financial Integrity. “Illicit Financial Flows”. 2025. https://gfintegrity.org/issue/ illicit-financial-flows/.
Issues, Contemporary, and I N Criminal. “Confiscation of Assets Laundered through Cryptocurrency Transactions in Indonesia: A Regulatory Framework Mahdavika Arsy Mubarak * Fakultas Hukum Universitas Islam Indonesia, Yogyakarta, Indo- nesia, Ayu Izza Elvany Fakultas Hukum Universitas Islam Indo” 1 (2024): 37-62. DOI: https://doi.org/10.20885/CICL.vol1.iss1.art3
Lin, Lindsay X. “Deconstructing Decentralized Exchanges”. Stanford Journal of Bloc- kchain Law and Policy (2019): 1-20. https://stanford-jblp.pubpub.org/pub/decons- tructing-dex.
Mahkamah Agung. “Putusan Nomor 29/Pid.Sus-TPK/2020/PN.Jkt.Pst”. Jakar- ta Pusat, 2021. https://putusan3.mahkamahagung.go.id/direktori/putusan/zaeb- c34f55f7675abbc5313030353037.html.
---. “Putusan Nomor 30/Pid.Sus/Tpk/2020/PN Jkt.Pst”. Jakarta Pusat, 2020. https://putusan3.mahkamahagung.go.id/direktori/putusan/zaeb5552814a- 167ab0c3313035303430.html.
Martini, Maíra. “The Weakest Links: The Consequences Of Non-Comprehensive Be- neficial Ownership Standards”. JSTOR (2019): 23-5. http://www.jstor.com/stable/ resrep20536.6.
Nelson, Febby Mutiara, Maria Dianita Prosperiani, Choky Risda Ramadhan and Pris- ka Putri Andini. “Cracking the Code: Investigating the Hunt for Crypto Assets in Money Laundering Cases in Indonesia”. Journal of Indonesian Legal Studies 9, n.º 1 (2024): 89-130. DOI: https://doi.org/10.15294/jils.vol9i1.4534
Putri, Tiara, Amiludin, Dwi Nurfauziah Ahmad, and Hidayatulloh. “Inadequate Cryp- tocurrency and Money Laundering Regulations in Indonesia (Comparative Law of US and Germany)”. Yustisia 12, n.º 2 (2023): 129-52. https://doi.org/10.20961/yus- tisia.v12i2.71835. DOI: https://doi.org/10.20961/yustisia.v12i2.71835
Radon, Jenik, and Mahima Achuthan. “Beneficial Ownership Disclosure: The Cure for the Panama Papers Ills”. Journal of International Affairs Editorial Board 70, n.º 2 (2017): 85-108. https://www.jstor.org/stable/90012622.
Sahri, Fidri. “Legal Action Withdrawal of Assets Proceeding from Corruption Money Laundering through Cryptocurrency”. 2023. https://doi.org/10.4108/eai.11-11- 2023.2351302.
Scorechain. “Are DEXs Widely Used to Launder Money and Finance Terrorism? Sco- rechain Report on the State of ML/TF through DEXs in 2020”. Researches and Sta- tistics. 2021. https://www.scorechain.com/blog/are-dexs-widely-used-to-launder- money-and-finance-terrorism.
Sitompul, Ariman. “Cryptocurrency Based Money Laundering in Indonesia”. Inter- national Asia of Law and Money Laundering 4, n.º 1 (2025): 7-12. https://doi. org/10.59712/iaml.v4i1.113. DOI: https://doi.org/10.59712/iaml.v4i1.113
Smart Valor. “Centralized vs. Decentralized Exchanges”. 2022. https://smartvalor.com/ en/news/cefi-defi.
Stobierski, Tim. “Decentralized Exchanges (DEXs) & KYC”. 2022. https://withperso- na.com/blog/decentralized-exchanges-and-kyc.
---. “How Do AML Regulations Apply to Crypto Exchanges?”. 2022. https://withperso- na.com/blog/aml-crypto.
Swartz, Kristi. “Mapping Out How Decentralised Exchanges Can Be Regulated”. 2021.
Teichmann, Fabian, and Marie-Christin Falker. “Cryptocurrencies and Financial Cri- me: Solutions from Liechtenstein”. Journal of Money Laundering Control 24, n.º 4 (2020): 775-88. https://doi.org/10.1108/jmlc-05-2020-0060. DOI: https://doi.org/10.1108/JMLC-05-2020-0060
Tropina, Tatiana, “Big Data: Tackling Illicit Financial Flows”. In Big Data: A Twen- ty-First Century Arms Race, 41-52 (Washington D. C.: Atlantic Council, 2017). https://cdn.atlanticcouncil.org/wp-content/uploads/2017/06/Big_Data_A_Twenty- First_Century_Arms_Race_web_0627_Chapter_4.pdf.
“United Nations Office on Drugs and Crime”. Accessed May 19, 2025. https://www. unodc.org/.
Wareza, Monica. “Megaskandal Asabri”. Market, August 10, 2021. https://www.cnb- cindonesia.com/market/20210810173814-17-267620/megaskandal-asabri-nomi- nee-pejabat-asabri-dicecar-kejagung.
Winarto, Yudho. “Kejagung Beberkan Peran Benny Tjokro Dan Heru Hidayat Di Ka- sus Asabri”. Kontan.co.id, February 1, 2021. https://nasional.kontan.co.id/news/ kejagung-beberkan-peran-benny-tjokro-dan-heru-hidayat-di-kasus-asabri.
Yazdanparast, Ehsan. “CEX vs DEX: A Comprehensive Comparison of Features”. Coinmonks, 2021. https://medium.com/coinmonks/cex-vs-dex-a-comprehensive- comparison-of-features-bb398d416d4f.
Yin, Hao Hua Sun, Klaus Langenheldt, Mikkel Harlev, Raghava Rao Mukkamala and Ravi Vatrapu. “Regulating Cryptocurrencies: A Supervised Machine Learning Approach to De-Anonymizing the Bitcoin Blockchain”. Journal of Management Information Sys- tems 36, n.º 1 (2019): 37-73. https://doi.org/10.1080/07421222.2018.1550550. DOI: https://doi.org/10.1080/07421222.2018.1550550