What is the legality of online trading brokers that are often endorsed or promoted by Youtubers such as Binomo or Forex? Is it legal in Indonesia? Are there any laws and regulations for this? Can people be punished if it is illegal?
DAFTAR ISI
INTISARI JAWABAN
There are several aspects that can be considered to determine whether Binomo is legal in Indonesia or not, one of which is whether there is a brokerage license from the Commodity Futures Trading Regulatory Agency (“CoFTRA”).
Referring to the Futures Brokers page, Binomo is not registered as a list of futures brokers who have obtained license numbers from CoFTRA.
If a broker or futures broker does not have a business license, then the broker or futures broker is not legal according to the law.
Please read the review below for a further explanation.
This article below is an update of the article entitled Legality of Binomo in Indonesia (Legalitas Binomo di Indonesia) which was first written by Ricky Pratomo and was first published on Wednesday, 28 November 2018.
All legal informations which are available through Klinik hukumonline.com have been prepared for educational purposes only and are general in nature (read the complete Disclaimer). In order to obtain legal advice specific to your case, please consult with Justika Partner Consultant.
Before addressing whether Binomo is legal, we will first explain what online trading brokers are in the form of Binomo and Forex.
What is Binomo?
According to our research, Binomo is a trading platform that can generate money through the increase or decrease of foreign exchange (forex) rates, stock prices, cryptocurrencies, and commodities.
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In a brief summary, Binomo is a platform for binary option trading. An option is a way to participate in the trading of financial services without the possession of actual portfolio assets (derivative transactions), i.e. by guessing changes in the price of a portfolio asset.[1]
Meanwhile, binary option trading is an option trading by guessing only 2 (two) available possibilities, namely the possibility of portfolio assets that might increase or decrease (yes or no proposition).[2] For example, currently per USD 1 is equivalent to IDR 14,500. What about the price prediction for tomorrow? We are presented with the choice of whether tomorrow the value of USD 1 will be higher or lower than IDR 14,500. If our option prediction is correct, then we will get a number of advantages.
What is Forex?
Forex is an acronym for foreign exchange.[3] In general, forex trading is the exchange of foreign exchange which is carried out in a foreign exchange market with the aim of making a profit from the difference between buying and selling.[4]
Forex trading is different from binary options. In forex trading, price movements in the forex market are influenced by many factors which include conditions around the world. Therefore, price movements and forex market conditions can be predicted using technical analysis and fundamental analysis.
However, if a forex transaction is undertaken by guessing whether the foreign exchange rate will increase (strengthen) or decrease (weaker), then the transaction can be categorized as option trading.
Legal Basis for Futures Option Trading
Prior to going into the discussion of whether Binomo is legal in Indonesia, according to out research, trading in binary options and foreign exchange falls into the category of options for futures contracts.
A futures contract is a form of standard contract for the purchase or sale of commodities with a later-settlement as stipulated in a futures exchange-traded contract.[5]
Futures exchanges are business entities that organize and provide systems and/or facilities for the sale and purchase of commodities based on futures contracts, sharia derivative contracts, and/or other derivative contracts.[6]
The legal basis for futures contract options can be found under:
those who own a futures brokerage license from the Commodity Futures Trading Regulatory Agency (“CoFTRA”).[9] Business licenses shall only be granted to futures exchange members who possess financial integrity, good business reputations, and professional skills.[10]
If the company does not have a futures brokerage license from CoFTRA, then the brokerage company is threatened with imprisonment for a minimum of 5 years and a maximum of 10 years and a minimum fine of IDR 10 billion, and a maximum of IDR 20 billion.[11]
Then, what about investors who invest through brokers who have not got CoFTRA futures brokerage? Are there legal consequences?
Throughout our research, there are no legal consequences for persons who invest through unlicensed brokers. However, it should be understood that the invested money is not guaranteed by the Indonesian government. Should there be any fraud occurs, it becomes the legal responsibility of the investor.
Is Binomo Legal in Indonesia?
There are several aspects that can be considered whether Binomo has legitimacy in Indonesia or not, one of which is securing a broker business license from CoFTRA.
Referring to the Futures Brokers page, Binomo is not registered in the futures broker list that has secured license numbers from CoFTRA.
If a broker or futures trading broker does not have a business license, then it is said to be illegal according to the provisions of the laws and regulations. Therefore, in order to answer your question as to whether Binomo is legal, Binomo is illegal in Indonesia. CoFTRA also affirmed that Binomo is illegal in Indonesia.
As a preventive measure, we recommend that you conduct transactions through brokers who have obtained brokerage business licenses from CoFTRA.
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These are the answers we can provide, we hope you will find them useful.