Yustisia Jurnal Hukum - Vol.
15 No.
1- 20
Available online at: http://jurnal.
Yustisia Jurnal Hukum A ISSN (Prin.
0852-0941 A ISSN (Onlin.
2549-0907 A Digital Asset Enforcement Reform in Indonesia:
Polycentric Governance Approach Syamsul Maarif1* 1The Supreme Court of the Republic of Indonesia and Lecturer at Faculty of Law.
Universitas Brawijaya.
Indonesia.
*Corresponding authorAos email: syamsul.
maarif@ub.
Article Information Received for publication October 31, 2025 Accepted after corrections April 13, 2026 Keywords: Digital Assets Governance.
Enforcement and Restitution.
Insolvency Reform.
DOI: 10.
20961/yustisia.
Abstract Digital assets are growing quickly in Indonesia, which has caused a lot of legal and institutional problems, especially when it comes to settling disputes over cryptocurrencies, tokenised assets, and other blockchain-based tools.
Despite regulatory recognition, there remains a critical gap between legal frameworks and effective remedies for victims, highlighting the urgency of enforcement This article examines the key legal problems, including regulatory fragmentation, ambiguity in asset classification, crossborder enforcement barriers, limitations in digital forensic capacity, and weak inter-agency coordination.
Using a normativedoctrinal method combined with comparative analysis of cases and regulatory developments, this study adopts a polycentric governance approach to assess how administrative, civil, and criminal enforcement pathways interact and where they fail.
The findings reveal that enforcement inefficiencies occur across the entire dispute chain, leading to inadequate victim recovery, legal uncertainty, and reduced market trust.
This study proposes a sequenced reform framework, including the enactment of a consolidated digital asset law with functional classification, strengthening regulatory authority with asset preservation powers, reforming insolvency law to recognise digital property, establishing standardised forensic and evidentiary protocols, and enhancing cross-border cooperation mechanisms Introduction The article examines how digital asset disputes are enforced in Indonesia and where the existing framework fails.
Digital assets, including cryptocurrencies, tokenised assets, and other ledger-based representations of value, have rapidly gone from fringe experiments into mainstream economic activity (Rodryguez De Las Heras Ballell, 2.
In Indonesia, as in many jurisdictions, the rise of digital asset trading platforms, decentralised finance experiments, and token-based fundraising has created new opportunities for investment, innovation, and financial inclusion.
At the same time, it has created a growing volume and variety of disputes (Mulyadi, 2.
Numerous issues Yustisia Volume 15 Number 1 (April 2.
Digital Asset Enforcement Reform.
include the loss of customer cash due to exchange failures, fraud and scams, custody and insolvency disputes.
AML/CFT problems, smart contract failures, and cross-border fraud that complicates evidence collection and remediation.
The resolution of these conflicts and the execution of remedies are significant for market trust, consumer protection, financial stability, and the long-term legitimacy of the digital asset Despite the necessity of enforcement, five persistent hurdles undermine the efficiency of Indonesia's present enforcement responses to digital asset disputes.
The first is the fragmentation of laws and regulations (Berutu et al.
, 2.
Multiple legal regimes and agencies may have overlapping roles concerning digital assets, such as consumer protection, financial regulation, commodity treatment, and criminal law.
This overlap creates uncertainty about the relevant rules and the appropriate enforcement forum (Bahtera et al.
, 2.
Second, ambiguity in classification.
Digital assets are diverse .
ayment tokens, security-like tokens, utility token.
, and an uncertain legal classification might result in gaps in enforcement and corrective regimes (Iris Ng, 2.
Third, jurisdictional and transnational hurdles, as the cross-border elements complicate evidence collection, asset freezes, and enforcement of foreign orders (Ngozi Samuel Uzougbo et al.
, 2024.
Dwitanti & Puji Simatupang, 2.
The FSBAos 2025 thematic review found cross-border cooperation for crypto-asset activities to be Aufragmented, inconsistent, and insufficientAy across jurisdictions (FSB, 2.
Fourth, technical evidence and forensics, i.
, demonstrating custody, tracing flows, and establishing chain-of-custody for digital evidence require specialised capacity that many enforcement actors lack (Kartono et al.
, 2024.
Frywis et al.
, 2.
Fifth, institutional capacity and coordination, because enforcement requires coordinated action by prosecutors, financial intelligence units, regulators, police cyber units, and civil courts, yet coordination is frequently ad hoc or hindered by data-sharing constraints (Rusman & Fakrulloh, 2024.
Lypez-Aguilar & Solanas, 2.
Within this enforcement focus, this article considers civil, criminal, and administrative enforcement pathways .
ow each pathway functions and where it succeeds or fail.
institutional design and inter-agency coordination mechanisms required for effective action.
operational capacities.
and governance options.
The geographic and temporal scope is Indonesia in the current policy moment, drawing on doctrinal analysis, comparative lessons, and case material to provide practical policy paths rather than solely theoretical models.
Prior studies on digital asset legislation and governance in Indonesia found crucial but still fragmented aspects of the regulatory problem.
Nitha and Westra .
show that the dispute resolution avenues presently available for cryptocurrency cases, including Indonesian Commodity Arbitration Board .
ereinafter abbreviated to BAKTI or Badan Arbitrase Komoditi Indonesi.
Consumer Dispute Settlement Agency .
ereinafter abbreviated to BPSK or Badan Penyelesaian Sengketa Konsume.
, and ordinary litigation, remain constrained by a legal vacuum and do not adequately protect investor Bahtera et al.
likewise argue that crypto-asset investors continue to face Yustisia Volume 15 Number 1 (April 2.
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weak legal protection because the regulatory framework remains incomplete, technically underdeveloped, and institutionally unintegrated.
In a similar vein.
Berutu et al.
find that overlapping authority and the transition from Commodity Futures Trading Regulatory Agency .
ereinafter abbreviated to BAPPEBTI or Badan Pengawas Perdagangan Berjangka Komodit.
to Indonesia Financial Services Authority .
ereinafter abbreviated to OJK or Otoritas Jasa Keuanga.
have not yet fully resolved fragmentation in supervision and legal certainty.
From the enforcement perspective.
Nelson et al.
further demonstrate that crypto-related asset recovery is hampered by blockchain tracing difficulties, limited asset-management mechanisms, and the slow pace of crossborder cooperation.
Collectively, these studies show that digital asset governance has already been examined through the lenses of legal certainty, investor protection, institutional design, and AML enforcement, and that each of these domains reveals significant weaknesses in the current Indonesian framework.
Nonetheless, the interaction of these flaws throughout the entire dispute enforcement chain remains inadequately examined.
Current studies predominantly examine digital assets through distinct regulatory or sectoral lenses.
However, they have not comprehensively elucidated the intersections of administrative, civil, and criminal pathways, nor have they addressed the shortcomings across various dispute categories, including exchange insolvency, fraud, custody failure, and cross-border asset dissipation, and the implications of these deficiencies on victim restitution and market actor accountability.
They still have not come up with a sequenced reform model that links asset classification, evidentiary standards, insolvency treatment, institutional coordination, and cross-border recovery all in one governance design.
This circumstance is especially true in Indonesia now that the OJK has taken over supervision.
This work addresses the identified research need.
The originality of this article resides in its enforcement-focused methodology for digital asset governance in Indonesia, integrating normative-doctrinal examination and systematic secondary case analysis to identify operational impediments and develop a polycentric, pragmatically ordered reform agenda for legal and institutional transformation.
The article presents four fundamental research questions derived from this diagnosis: What are the primary legal and institutional impediments to the effective enforcement of digital asset disputes in Indonesia? How do enforcement deficiencies vary across different types of disputes .
, exchange insolvency, fraud/scams, custody failures.
AML violations, smart contract failure.
? What operational and capacity investments .
echnical forensics, training, evidentiary standards, cross-border collaboratio.
are necessary to implement these models? Additionally, how can Indonesia strategically sequence reforms to ensure that short-term enhancements .
uick win.
and long-term structural changes mutually reinforce one another? The article makes three contributions.
First, it provides an empirical mapping of enforcement actors, dispute pathways, and operational bottlenecks specific to the Indonesian context.
Second, it develops a typology of enforcement challenges that links dispute categories to enforcement obstacles and remedial shortfalls, enabling targeted policy design.
Third, it offers a practical governance roadmap for legal, institutional, and technical reform, sequenced to balance effectiveness, feasibility, and the protection of Yustisia Volume 15 Number 1 (April 2.
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fundamental rights.
These contributions go beyond general calls for better regulation to deliver concrete, actionable options that acknowledge the political and technical constraints of implementation.
The article proceeds as follows.
Section 2 sets out the conceptual and theoretical framework, defining digital assets and classifying dispute types.
Section 3 maps the legal and institutional landscape of enforcement actors and pathways.
Section 4 presents the methodology.
Section 5 analyses case studies illustrating enforcement failures and partial successes.
Section 6 identifies and discusses the principal challenges.
Section 7 proposes sequenced policy pathways and governance reforms.
Section 8 concludes.
This study employs a normative-doctrinal approach complemented by structured secondary-case analysis.
The doctrinal strand critically interprets statutes, regulatory instruments, administrative guidance, and judicial decisions to establish what the law prescribes regarding enforcement powers and remedies.
The normative strand evaluates those rules against the policy and legal criteria developed in the conceptual framework: effectiveness, timeliness, proportionality, adaptability, and cross-border Empirical material derives exclusively from secondary sources: legislation and regulatory instruments.
regulator circulars and licensing records.
prosecutor and court FATF reports and international agency publications .
ncluding IOSCOAos 2023 Policy Recommendations and the FSBAos 2025 Thematic Revie.
published forensic and industry reports.
and contemporaneous media accounts used for chronology and operational detail.
Theory is applied iteratively: regulatory pluralism frames overlapping legal regimes, polycentric governance diagnoses coordination failures, and socio-technical legalism identifies where technical gaps undermine legal remedies.
Cases are selected purposively to illustrate the typology of disputes and enforcement pathways.
Selection criteria prioritise variation on three dimensions: .
dispute type .
ustodial insolvency, fraud.
AML-related cases, smart-contract failure.
institutional pathway engaged .
dministrative, civil/insolvency, crimina.
presence of cross-border elements.
This purposive sampling enables analytic generalisation to categories of enforcement problems rather than statistical generalisation to all incidents.
Each case is evaluated against four indicators derived from the conceptual framework: .
the adequacy of the enforcement pathway relative to the dispute type.
the quality, admissibility, and chain-of-custody integrity of digital evidence .
the degree of inter-agency coordination among police, prosecutors, regulators, and financial intelligence units.
the speed and extent of victim restitution or asset recovery.
II.
Conceptual and Theoretical Framework Before outlining the conceptual categories used in this study, the analytical framework must first be grounded in broader socio-legal theory.
Niklas LuhmannAos Legal System Theory understands law as an autonomous yet cognitively open social Yustisia Volume 15 Number 1 (April 2.
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system that stabilises normative expectations through the legal/illegal binary code (Luhmann, 2.
Digital assets introduce new forms of economic communication, technological risk, and transnational interaction that existing legal categories do not fully absorb.
When classification, supervisory mandates, and remedial pathways remain fragmented, law loses part of its capacity to reduce complexity and provide predictable expectations (Paterson, 2.
Operationally, this lens is applied in the case analysis to diagnose where regulatory gaps prevent law from performing its complexity-reducing functionAispecifically, where actors cannot determine which regime applies, which institution has competence, or which remedy is available.
Emile DurkheimAos structural functionalism and Talcott ParsonsAo functionalist theory explain that in complex societies, law performs a restitutive function by coordinating differentiated social roles and preserving integration.
Applied to digital assets, these perspectives reveal that the regulatory problem extends beyond isolated statutory gaps to encompass dysfunction across an interconnected institutional field involving market supervisors, financial intelligence bodies, courts, law enforcement, and private platforms.
Operationally, this lens diagnoses coordination failures between enforcement actors identified in the case studies and informs the institutional design Three domain-specific theoretical lenses further structure the analysis.
First, regulatory pluralism recognises that digital asset governance is shaped by overlapping public, private, and market-based norms (Backer, 2.
it frames the mapping of overlapping legal regimes across administrative, civil, and criminal pathways.
Second, polycentric governance locates enforcement within a network of nested authorities where multiple actors share responsibilities (Ostrom, 2010.
Gunningham & Holley, 2016.
Alston et al.
, 2.
it diagnoses why single-agency solutions are insufficient and why integrated reform and polycentric governance are complementary rather than Third, socio-technical legalism understands law and code as mutually constitutive, such that enforceability depends on technical architecture, operational standards, and platform design alongside statutory text (Brown & Marsden, 2.
explains why technical gaps in blockchain forensics and platform architecture undermine legal remedies.
Digital assets are defined as ledger-represented units of value whose legal nature is determined by their economic function, technological form, and regulatory framing.
This includes protocol-governed instruments, tokenized securities, utility tokens, stablecoins, and native payment tokens.
Treating digital assets as heterogeneous economic objects rather than a single legal species avoids category errors that produce enforcement gaps (Kochergin, 2.
, consistent with international guidance favouring risk-based and activity-based regulation (Perlman, 2019.
IOSCO, 2.
A precise typology of disputes is essential because each class maps onto different evidentiary, procedural, and remedial requirements.
The principal categories are: .
custodial insolvency and exchange failure.
fraud and scams.
AML/CFT-related laundering and illicit financing.
smart contract failures and protocol-level bugs.
cross-border disputes involving extraterritorial evidence and asset recovery.
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Operationalising enforcement further requires specification of several legaltechnical concepts: custody .
ontrol over private keys and effective dominion over provenance .
n-chain and off-chain transaction histor.
inking pseudonymous addresses to real-world actor.
and evidentiary integrity .
hain of custody for digital forensic artefact.
The landmark United States v.
Sterlingov (D.
rulingAithe first comprehensive Daubert analysis of blockchain analytics softwareAiillustrates the evidentiary standards enforcement must meet.
Any reform should be evaluated against effectiveness in achieving redress and timeliness in preventing dissipation of value.
proportionality and protection of fundamental rights.
operational feasibility given existing institutional capacities.
adaptability to technological change.
cross-border operability.
and equitable access to i.
Legal and Institutional Mapping Statutory and Regulatory Frameworks IndonesiaAos regulations for digital assets have changed from a focus on commodities under the Commodity Futures Trading Supervisory Agency to a broader financial-asset approach under the Financial Services Authority.
In the past.
BAPPEBTI considered crypto as tradable commodities and set market rules through Peraturan Bappebti No.
5 of 2019 and its related lists and amendments.
Meanwhile.
Bank Indonesia has consistently prohibited the use of cryptocurrencies as a means of payment.
Recent administrative and legislative changes have resulted in the transfer of supervisory responsibilities to OJK through POJK No.
27 of 2024.
Guidelines for the trading, licensing, governance, and reporting of digital financial assets are established by this rule.
Furthermore, it is a step in the direction of incorporating a variety of cryptocurrency activities into the financial regulatory framework (Soerjadi & Kusmiadi.
The simultaneous AML/CFT requirements for virtual asset service providers have been a major focus of Indonesia's financial intelligence unit, as noted in the FATF mutual evaluation.
According to (Berutu et al.
, 2.
, this calls for compliance with reporting guidelines and customer due diligence requirements that intersect with specific industry regulations.
However.
Bank Indonesia has consistently stated that cryptocurrencies are not legal tender and has prohibited their use for payments in compliance with domestic currency law and related BI regulations.
This position promotes monetary sovereignty and lowers the macrofinancial risks connected to tokenized payments.
However, it allows for a great deal of investment and trading outside the payments perimeter.
This distinction between permissive trading and payment exclusion has long influenced Indonesian policy decisions.
Cryptocurrency's primary perception as an investable asset reduces direct exposure to monetary policy while increasing the need for supervisory coordination to manage market integrity, fraud, and custody risks (Fahira et al.
, 2.
POJK No.
27 of 2024 marks a substantial shift in that architecture by giving OJK supervisory authority over Yustisia Volume 15 Number 1 (April 2.
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a wide class of "digital financial assets" and creating a single set of rules for the trading, licensing, governance, and reporting of digital financial asset operations (Erwanto & Santoso, 2.
Practically, this reclassification brings crypto activities under prudential-style supervision and consumer-protection mandates, enabling OJK to impose capital, governance and reporting standards that were largely absent under the commodity AML/CFT obligations and financial-intelligence work intersect tightly with these sectoral reforms.
IndonesiaAos financial intelligence unit and the FATF mutualevaluation process have emphasised the need for VASPs and other market participants to meet customer due-diligence, suspicious-transaction reporting and cross-border cooperation standards Ai obligations that cut across BAPPEBTI.
BI and now OJK responsibilities and that require robust inter-agency coordination and informationsharing protocols.
The FATF review in particular highlights both progress and remaining effectiveness gaps, signalling that regulatory reallocation must be accompanied by operational upgrades .
upervisory capacity, standardised SAR formats, and public-private liaison mechanism.
to translate rulebooks into enforceable compliance regimes .
ee Izmi & Siagian, 2.
Organisational Mapping of Enforcement Actors Enforcement is polycentric and functionally distributed across criminal, prudential, payments, information and intelligence agencies.
Enforcement is polycentric and functionally distributed.
The Indonesian National Police (Bareskrim Cyber Crime Directorat.
handles criminal complaints and seizure operations.
The ProsecutorAos Office litigates criminal asset recovery and coordinates mutual legal assistance requests.
OJK, as the newly empowered prudential supervisor, can conduct onsite examinations, require capital and operational safeguards, and enforce segregation and reporting Bank Indonesia retains exclusive authority over legal tender and payment Indonesian Financial Transaction Reports and Analysis Center .
ereinafter abbreviated to PPATK or Pusat Pelaporan dan Analisis Transaksi Keuanga.
performs the intelligence function, analysing suspicious transaction reports and operationally linking regulators, prosecutors, and police.
Despite this division of labour, enforcement is frequently constrained by overlapping remits, slow inter-agency procedures, uneven technical capacity for blockchain forensics, and the absence of a supervisor with express restitution powers.
These frictions motivate proposals for clearer SOPs, a national coordinating mechanism, accredited forensic units, and stronger publicAeprivate investigative linkages.
Dispute Pathways Digital asset disputes follow three overlapping procedural tracks: administrative enforcement against licensed intermediaries.
civil litigation and insolvency claims.
criminal prosecutions for fraud, theft, or money laundering.
Administrative pathways permit licensing sanctions and supervised remediation but are limited in delivering direct restitution.
Civil courts face evidentiary challenges in tracing on-chain flows.
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Criminal routes enable freezes and forfeiture but depend on specialist cyber-forensic Private dispute resolution and platform terms of service supply complementary but uneven remedial options.
Cross-Borders Enforcement Cross-border recovery operates through IndonesiaAos mutual legal assistance system, but practical difficulties persist.
Formal MLA requests proceed through the Ministry of Law and Human Rights and the Attorney GeneralAos OfficeAia process that is typically too slow for urgent digital asset freezes (Wibowo, 2.
The pseudonymous nature of addresses, the use of mixers and cross-chain bridges, and rapid AuchainhoppingAy permit perpetrators to disperse proceeds in minutes, outrunning MLA processing times (Scorpan, 2021.
Prawira & Alamsyah, 2.
MLATs were not drafted with crypto-specific preservation in mind, and many central authorities lack standardised templates for urgent preservation notices.
Comparative studies identify the absence of crypto-tailored MLAT forms and weak mechanisms to convert rapid preservation notices into enforceable domestic restraint as recurring obstacles (Nelson et al.
, 2.
The Tilburg Law ReviewAos case study of Netherlands cross-border crypto investigations confirms that traditional MLA systems are structurally inadequate for the speed required (Tilburg Law Review, 2.
IndonesiaAos Financial Technology & Bitcoin Development Bitcoin (BTC) occupies a dominant and distinctive position within IndonesiaAos digital-asset ecosystem.
Regulator and industry compilations show that BTC consistently ranks among the top traded assets by value on domestic platforms and that the rapid expansion in registered and active crypto accounts has been largely driven by trading in a small set of major tokens.
Bitcoin foremost among them.
Official and industry sources place IndonesiaAos crypto investor base in the tens of millions and record a large year-on-year increase in aggregate on-exchange transaction value in 2024, underscoring that disputes over BTC transfers and custody are empirically non-trivial relative to other token classes.
Structurally.
Bitcoin trading in Indonesia is concentrated on a handful of licensed trading platforms that combine order-book execution with custodial wallet services.
these platforms typically operate hot/cold wallet architectures and present a singlepoint nexus for execution, custody and settlement.
This institutional concentration means that operational failures or contested on-chain movements of BTC produce systemic exposure.
A single exchange outage or exploit can generate large numbers of overlapping contractual, tort and insolvency claims .
ustodial liability, contract performance, conversion and tracin.
The empirical record already shows how BTC-specific incidents crystallise dispute High-profile security breaches in 2024Aimost notably the September exploit affecting a major domestic platform, which led to multi-million-dollar losses including dozens of BTC being drained from hot walletsAidemonstrate both the scale of potential Yustisia Volume 15 Number 1 (April 2.
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BTC misappropriation and the practical difficulties of immediate asset preservation and forensic tracing across on-chain and off-chain venues.
Analyses of the exploit and attendant fund flows highlight typical operational vectors .
ot-wallet compromise, cascading liquidity freeze.
that produce claimant-level harms and complicate recovery, thereby motivating the articleAos focus on preservation orders, custodial standards and cross-border enforcement of BTC claims.
IV.
Case Study Overview of Indonesian Enforcement Actions Enforcement measures in Indonesia's growing cryptocurrency business have taken place in both the criminal and regulatory domains.
Police and prosecutors have handled fraudulent "crypto investment" schemes as general financial crimes, while regulators have acted administratively.
The EDCcash case .
8Ae.
illustrates criminal enforcement against a large-scale Indonesian National Police Criminal Investigation Agency for the economic crimes unit arrested the promoter in April 2021, citing 57,000 victims and seizing vehicles, cash, and gold.
The JYPRX/SYIPC/LEEDSX case .
shows cross-border complexity: Directorate of Cyber Crime dismantled an international online scam promising stock and crypto trading gains.
Approximately ninety victims lost Rp105 billion, and six suspects were charged under the Law Number 1 of 2024 on the Electronic Information and Transactions .
ereinafter abbreviated to ITE la.
, fraud provisions (Indonesian Criminal Code Art.
, and money-laundering statutes.
A Malaysian suspect remains on InterpolAos wanted list.
By contrast.
BAPPEBTIAos response to the September 2024 Indodax hack was purely administrative: summoning the exchange and AucoordinatingAy to investigate the breach, with no direct restitution mechanism.
Through the lens of regulatory pluralism, these instances show that victims must choose between criminal prosecution and administrative review, with no separate civil framework for digital assets.
Polycentric governance theory illustrates the coordination problem: criminal and administrative paths work concurrently without integration, resulting in duplication and delay.
Socio-technical legalism explains why the Indodax breach, where quick on-chain transfers rendered seizure orders potentially irrelevant, requires technological preservation capabilities that the current architecture does not Judicial Treatment: Decision of the Supreme Court of Indonesia No.
338/PDT/2020/PT SMG
This decision provides a rare Indonesian judicial encounter with Aukoin virtual digitalAy as the subject-matter of a commercial agreement.
The dispute arose from a 2018 cooperation agreement for digital coin trading that included an express promise to provide land title as security.
the pledged mortgage was never effectuated.
On appeal, the Semarang court emphasised two doctrinal points: first, the contractual relationship was treated under ordinary civil-law doctrines .
reach, restitutio.
rather than by treating the digital token as legal tender or secured collateral.
second, the absence of Yustisia Volume 15 Number 1 (April 2.
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clear statutory recognition meant that traditional real-property remedies could not be mechanically transposed onto digital-asset transactions.
The case reveals the evidentiary and remedial gap facing claimants: courts will enforce ordinary contractual obligations where a valid contract and demonstrable loss exist, but they lack settled legal characterisation of crypto as money or collateralAi leaving preservation, valuation, and cross-border enforcement questions unresolved without targeted procedural tools.
Evidence and Investigative Methods Enforcement agencies have deployed both blockchain forensics and traditional investigative methods.
In the JYPRX case, investigators traced transactions through wallet addresses and communication records, examining WhatsApp conversations revealing victims were prompted to pay fictitious AutaxesAy to withdraw money, and discovering sixty-seven nominee bank accounts used for laundering.
BinanceAos investigators assisted Bareskrim by locating relevant cryptocurrency wallets, enabling the freezing of approximately US$200,000 in proceeds from a pig-butchering scheme.
For regulatory investigations, forensic alerts and internal security reviews are Following the Indodax breach, cybersecurity firm reports showed millions of dollars of ether moving from Indodax wallets, prompting BAPPEBTI to demand a system lockdown and user balance guarantees.
Notably, no Indonesian case to date has involved smart-contract failure as a cause of action.
Hence, the result is .
Enforcement pathways were adequate for straightforward fraud but inadequate for exchange-level custody disputes.
digital evidence quality depended heavily on private-sector cooperation (Binance, cybersecurity firm.
rather than public forensic capacity.
inter-agency coordination was achieved through ad hoc channels requiring prolonged coordination.
victim restitution remained marginal despite successful investigations.
Outcomes and Recovery The EDCcash founder was sentenced to six yearsAo imprisonment .
educed from the ten-year deman.
other ring members received two-to-five-year sentences.
Investigators froze approximately Rp1.
53 billion in suspect accounts.
However, actual victim refunds have been minimal.
In the Indodax incident, the exchange promised customers that balances were safe, but no legal mechanism existed to reimburse stolen This patternAisuccessful prosecution but negligible financial recoveryAi characterises the remedial inadequacy of current enforcement.
Singapore Comparative: TrueCoin LLC v Techteryx Ltd .
SGHC 296 The Singapore High Court decision .
November 2.
provides a comparative reference for cross-border digital asset dispute resolution.
The central issue was whether to grant an anti-suit injunction restraining Hong Kong proceedings that threatened to undermine Singapore-seated arbitrations arising from a cross-border stablecoin business transaction.
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The Court applied established principles: an anti-suit injunction is appropriate where there is a prima facie breach of a valid arbitration agreement and no compelling countervailing considerations.
Finding a prima facie breach, the Court rejected arguments based on comity and foreign-law complexity, concluding that permitting the Hong Kong actions to proceed would defeat the agreed arbitral process.
The decision confirms that clearly drafted arbitration clauses can prevent forumshopping in crypto disputes, and that anti-suit relief can complement emergency arbitration in preventing asset dissipation.
For Indonesia, this illustrates the value of well-designed private dispute-resolution clauses within a polycentric governance frameworkAian institutional option currently underutilised in Indonesian crypto SingaporeAos broader jurisprudenceAiincluding ByBit v Ho Kai Xin .
SGHC 199 .
ecognising cryptocurrency as property held on trus.
and Cheong v Three Arrows Capital .
SGHC 21 .
stablishing the situs of cryptoassets at the residence of the private-key controlle.
Aifurther demonstrates how judicial development can fill regulatory gaps that IndonesiaAos courts will inevitably confront.
Discussion: Key Challenges to Effective Digital Asset Governance Enforcement This section analyses six interconnected challenges, each diagnosed through the theoretical framework and supported by case evidence.
To avoid redundancy, each subsection addresses a distinct dimension of the enforcement problem.
Fragmented Legal Classification Effective enforcement requires a functionally oriented classification so that legal duties, remedial powers, and supervisory responsibilities align with economic activity.
In practice, however, crypto moved from BAPPEBTIAos commodity regime to OJKAos remit only with POJK No.
27/2024, while Bank Indonesia retains exclusive control over legal tender and PPATK supplies AML intelligence.
The EDCcash and JYPRX cases show how actors exploited definitional ambiguity to evade financial supervision.
Comparative frameworksAiMiCAAos tripartite taxonomy (ARTs.
EMTs, other crypto-asset.
, the UK Law CommissionAos Authird categoryAy of property, and UNIDROITAos control-based Principles on Digital Assets .
Aiillustrate the consolidated approaches that IndonesiaAos current framework has not yet adopted.
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Table 1 below maps dispute types to resolution methods and enforcement challenges across digital asset classes, demonstrating the systemic nature of these gaps.
Asset Type Common Disputes Resolution Methods Enforcement Challenges Digital assets, private digital Disputes with exchanges, default/tort Civil lawsuits(Articles 1365, 1243 Civil Cod.
, non-litigation .
rbitration, mediatio.
BAPPEBTI supervision Lack of formalized regulations, trust in broker information Crypto assets Exchange failures, fraud, custody, market No specific mechanisms.
recommends OJK digital dispute resolution, arbitration laws not Absence of mechanisms, legal uncertainty, lack of Cryptocurrency Investor-marketplace disputes, fraud Arbitration (BAKTI).
BPSK mediation, litigation, law No specific protection for investor losses, legal Crypto assets Money laundering, asset Penal/non-penal .
olice, prosecutor.
Financial Intelligence Units.
Interpol.
Indonesian Financial Transaction Reports and Analysis Center (PPATK).
AntiMoney Laundering Law Blockchain tracing, cross-border, lack of asset Non-fungible tokens (NFT.
Copyright infringement, ineffective dispute Courts, arbitration, mediation, regulatory Legal loopholes, lack of tech-based oversight.
Crypto assets as Theft/hacking, delisting, loss of collateral Litigation, non-litigation .
egotiation, mediatio.
, fiduciary guarantees Technical execution, due diligence, asset value Digital Fraud, data theft Courts, regulatory Lack of comprehensive law, cybercrime risk, regulatory capacity Non-fungible tokens (NFT.
Ownership, authenticity.
Courts, arbitration, mediation, conciliation Legal vacuum, weak cyberspace protection Non-fungible tokens (NFT.
, smart contracts Smart contract failures, cross-border crime Courts .
Civil Code.
Electronic Information and Transactions Law No regulation, technical complexity, cross-border Crypto assets Institutional overlap, regulatory compliance Regulatory enforcement.
OJK/BAPPEBTI Fragmented framework, limited tech oversight There are a lot of problems with exchange failures and custody breakdowns, fraud and marketplace misconduct, questions of ownership and authenticity .
articularly for NFT.
, smart-contract failures, hacking/theft, and money laundering.
The remedies used are different and often not planned ahead of time.
They include civil lawsuits .
or Yustisia Volume 15 Number 1 (April 2.
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investor loss claim.
, arbitration/mediation, regulatory oversight and administrative actions, and criminal investigations when fraud or cybercrime is suspected.
However, the table makes it clear that these ways of fixing things often run into systemic problems, like a lack of tailored regulations and clear legal categories, limits on evidence and blockchain tracing, a lack of insurance or formal recovery mechanisms, fragmentation among supervisors, and cross-border enforcement issues.
As a result, many disputes either move slowly or get lost in enforcement gaps.
Evidentiary and Technical Gaps The conceptual framework identified custody, provenance, attribution, and evidentiary integrity as core enforcement concepts.
The cases expose a persistent gap between this ideal and operational reality.
Prosecutors and courts face difficulties proving constructive control, linking pseudonymous addresses to natural persons, and preserving volatile evidence before assets move across chains.
The Indodax breach illustrates how rapid on-chain transfers render seizure orders moot unless preservation is immediate and coordinated.
Internationally, the Sterlingov ruling (D.
established that Chainalysis ReactorAos clustering methodology satisfies all four Daubert factors for admissibilityAi but no comparable evidentiary standard exists in Indonesian law.
Frywis et al.
document the risks that CoinJoin and other obfuscation techniques pose to forensic Indonesian enforcement actors require both validated toolchains and express statutory guidance on the admissibility of blockchain-derived evidence.
Institutional Coordination Failures Polycentric governance theory expects nested authorities to coordinate through shared protocols.
Indonesian practice remains uneven.
Cyber Crime Directorate, the ProsecutorAos Office.
PPATK.
OJK, and Bank Indonesia have complementary roles but often act through ad hoc channels, producing duplication and delay.
The JYPRX investigationAidependent on prolonged banking traces and international leadsAi exemplifies how sequential rather than parallel inter-agency action slows both criminal proceedings and asset preservation.
The FATFAos 2023 mutual evaluation acknowledged IndonesiaAos risk awareness but identified operational frictions in time-sensitive cooperation (FATF, 2.
Cross-Border Operational Limits The case material confirms that perpetrators and custody chains routinely traverse national borders.
One JYPRX suspect is sought via Interpol and MLA channels.
Formal mutual legal assistance is too slow for digital assets that can be moved and mixed within Indonesia lacks standardised, fast crypto-specific MLAT templates and provisional freeze mechanisms tailored to virtual assets.
The FSBAos 2025 thematic review and IOSCOAos 2025 implementation review both confirm this as a global problem, not unique to Indonesia, but one that disproportionately affects jurisdictions with less developed cross-border enforcement infrastructure.
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Digital Asset Enforcement Reform.
Remedial Inadequacy A central normative yardstick is whether remedies deliver timely redress.
The cases show a persistent shortfall.
Courts have convicted perpetrators but victim restitution has been marginal because current instruments do not translate forensic success into prompt asset return.
Administrative powers enable suspension or fines, yet regulators lack express authority to compel reimbursement or mandate insurance.
Comparative evidence from the FTX bankruptcyAiwhere the estate recovered approximately US$7 billion and customers with claims under US$50,000 received roughly 118 per cent of petition-date valuesAidemonstrates that well-designed insolvency frameworks can achieve substantial recovery even in complex crypto failures (Lipson & Skeel, 2.
IndonesiaAos insolvency framework does not yet accommodate digital property.
Political Economy and Regulatory Incentives Exchanges and financial firms resist costly custody or capital rules.
Regulators balance market growth with consumer protection, leading to incremental rather than transformative reform.
Limited forensic and prosecutorial resources concentrate attention on high-profile fraud rather than systemic improvements.
POJK No.
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shifts institutional incentives by giving OJK a stronger supervisory role, but the new rules will only improve enforcement with investments in capacity, clearer remedial powers, and transparent safeguards against conflicts of interest.
VI.
Pathways for Digital Assets Governance Reform Following Luhmann, law must derive complexity into legally intelligible categories and procedures while remaining open to technological change.
IndonesiaAos current framework has not yet performed that function.
The findings reveal that digital asset actors do not always know which regime applies, which institution has competence, or which remedy can realistically secure recovery.
This systemic deficit also has a social and institutional dimension.
DurkheimAos theory explains that law preserves social solidarity by coordinating differentiated roles.
Parsons understands law as an integrative mechanism enabling adaptation without losing normative order.
The findings show that IndonesiaAos digital asset disputes reflect dysfunction across an interconnected fieldAiOJK.
Bank Indonesia.
PPATK, police cyber units, prosecutors, courts, insolvency mechanisms, and private platforms.
When these institutions lack procedural integration, common evidentiary standards, or timely coordination, law cannot perform its restitutive and integrative functions.
Accordingly, the reform pathway rests on three interdependent pillars.
First, a functionally oriented legal classification and consolidated legal base answers the Luhmannian need for legal coherence.
Second, a remedial architecture composed of administrative redress, insolvency adaptation, and civil recovery tools restores the Durkheimian Yustisia Volume 15 Number 1 (April 2.
Digital Asset Enforcement Reform.
restitutive function of law.
Third, an operational governance framework based on leadagency coordination, accredited forensic capacity, and expedited international cooperation answers the Parsonian requirement that differentiated institutions be integrated into an adaptive and stable legal order.
Asset Classification and Consolidated Legal Base A consolidated digital-asset statute .
r integrated amendments to POJK.
BI.
AML, and capital-markets la.
should adopt a functional taxonomyAipayment tokens, investment/security-like tokens, utility tokens, stablecoins, and protocol-native instrumentsAiso that prudential, consumer-protection, and AML/CFT obligations follow economic function.
Drawing on the EUAos MiCA framework and the UNIDROIT Principles on Digital Assets and Private Law .
, the consolidated statute should operationalise the taxonomy through: .
a public registry and dynamic Aupermitted-listAy .
modular licensing categories with harmonised minimum capital and governance requirements.
mandated custody standards distinguishing hotwallet operational balances from cold-storage segregation.
Transparency tools should function as regulatory instruments.
AuProof-of-reservesAy disclosures must be complemented by periodic attested financial statements, independent attestations of off-chain liabilities, and continuous monitoring APIs.
The statute should resolve cross-cutting questions about property, custody, and insolvency ex anteAiincluding whether token holdings on an exchange are proprietary client property or contractual claims, and the priority ranking among creditors in a digitalasset insolvency.
Emergency powersAito appoint technical custodians, to issue swift preservation notices, and to require immediate cold-wallet freezes subject to judicial oversightAishould be embedded.
Institutionally, the statute should mandate inter-agency protocols: statutory obligations for information-sharing between the prudential supervisor, central bank.
PPATK, and criminal authorities.
standardised SAR formats for VASPs.
and fast-track MLAT templates.
Administrative Redress Administrative redress should be redesigned for speed and direct victim The reform should: .
empower regulators to require interim custodial arrangements and order escrowed disbursement where fiduciary breaches are credibly .
create a regulator-managed emergency remediation fund financed by industry levies or mandatory insurance.
establish expedited administrative adjudication with defined evidentiary rules for digital artefacts.
Insolvency Reform Insolvency law must be adapted to on-chain assets.
The reforms should establish:
rebuttable presumptions that tokens in designated client accounts are proprietary client property, and that custodian-controlled wallets give rise to constructive-trust presumptions over on-chain balances.
expedited preservation orders authorising Yustisia Volume 15 Number 1 (April 2.
Digital Asset Enforcement Reform.
wallet freezes, withdrawal suspensions, and reconciliation requirements.
statutory roles for technical custodians empowered to operate on-chain.
creditorsAo committees including certified blockchain forensic advisors.
calibrated avoidance and clawback rules with safe harbours for bona fide transfers.
standardised token valuation and .
cross-border recognition provisions including model clauses for foreign insolvency orders and foreign technical custodian appointments.
The comparative experience of FTXAos Chapter 11 proceedingsAiwhere the bankruptcy court effectively functioned as a crypto market regulator (Yadav & Stark, 2.
Aidemonstrates both the necessity and the feasibility of insolvency frameworks adapted to digital assets.
JapanAos decade-long Mt.
Gox civil rehabilitation process, by contrast, illustrates the costs of inadequate statutory tools (Steele & Morishita, 2.
Institutional Design and Coordination A lead-agency model should be formalised through the appointment of a national coordinator for digital asset enforcement, establishing explicit operational protocols linking police cyber units, prosecutors.
PPATK.
OJK.
Bank Indonesia, and specialist judicial chambers.
The coordinator should maintain SOPs for preservation notices, a secure evidence-sharing platform, and quick-reference templates for international Multi-disciplinary rapid-response teams should be created, trained in chain-of-custody for blockchain artefacts and empowered to issue administrative preservation requests.
Evidentiary Standards Legislatures or courts should adopt statutory guidance clarifying: .
the legal effect of cryptographic hashes and blockchain timestamps as prima facie provenance markers.
required elements of admissible chain-of-custody affidavits for on-chain and offchain records.
standards for expert testimony about attribution, including disclosure of tool versioning and validation evidence.
An accreditation regime for forensic providers and tools should cover personnel certification, laboratory security, and toolchain validation.
Licensed VASPs should be required to expose standardised preservation and evidence interfaces: machinereadable SAR templates.
API endpoints for emergency preservation requests, and encrypted export formats.
Standardised chain-of-custody artefacts should include cryptographic snapshots, metadata describing extraction parameters, transaction graphs in common interchange format, and human-readable narratives linking technical output to legal theory.
Cross-Border Cooperation Cross-border cooperation should employ a two-track approach: .
fast-track operational agreements (MOUs or regulatory cooperation agreement.
for emergency preservation and evidence sharing.
binding mutual-assistance instruments Yustisia Volume 15 Number 1 (April 2.
Digital Asset Enforcement Reform.
rypto-specific MLAT templates, provisional-freeze recognition clauses, and enforceable recognition of foreign technical custodian appointment.
Governments should agree on a minimal evidence package accompanying emergency preservation requests and adopt a common preservation order template.
National registries of regulated VASPs with 24/7 points of contact, coupled with APIbased emergency-preservation endpoints, should permit authenticated preservation requests that platforms can implement immediately.
Model statutory language permitting provisional recognition of foreign technical custodians should reduce the time to preserve on-chain assets.
VII.
Conclusion This study has demonstrated that IndonesiaAos digital-asset enforcement challenges constitute a single systemic problem: a persistent misalignment between rapidly evolving ledger-based technologies and the legal-institutional framework.
The consequence is that timely restitution and effective deterrence remain elusive, victims incur unrecovered losses, and market confidence is weakened.
Three main findings emerge.
First, legal fragmentation and classification ambiguityAicompounded by the incomplete transition from BAPPEBTI to OJKAipermit actors to exploit regulatory boundaries and deprive victims of clear enforcement Second, institutional coordination failures, evidentiary deficits, and slow cross-border processes transform otherwise recoverable incidents into permanent Third, current remedial mechanisms do not lead to the successful investigation and prosecution of meaningful victim restitution.
The sequenced reform agenda proposed, from comprising a consolidated statute with functional classification, empowered administrative redress, adapted insolvency rules, accredited forensic standards, and expedited international cooperation, addresses these interconnected failures as components of a coherent governance design rather than isolated regulatory If Indonesia combines clear legal foundations with appropriate procedural powers, credible technical capacity, and pre-negotiated international cooperation mechanisms, enforcement can become a visible public goodAiprotecting consumers, restoring market trust, and supporting legitimate technological development.
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