Legal and Juridical Insights into the Validity of Crypto Asset Transactions Under Indonesian Contract Law

Cryptocurrency and virtual assets continue to expand in Indonesia, raising important questions about their legal status under Indonesia contract law. This article examines the validity of cryptocurrency sale and purchase agreements and the regulatory framework that governs crypto assets.

Regulatory Framework

Sale and Purchase Agreement

In general, agreements are regulated in Article 1313 of the Indonesian Civil Code (“ICC”), namely an act by which one or more persons bind themselves to one or more other persons. Theoretically, agreements are divided into 2 (two) groups, namely obligatory agreements and non-obligatory agreements. An obligatory agreement is an agreement that obligates a person to deliver or pay something. One type of obligatory agreement is a nominate agreement, which means that the agreement is specifically regulated in the law. One agreement that constitutes a nominate agreement is a sale and purchase agreement.

Sale and purchase is regulated in Article 1457 of ICC. Sale and purchase is an agreement by which one party binds itself to deliver an item, and the other party to pay the price that has been agreed upon. Thus, a sale and purchase agreement is a reciprocal agreement in which one party (the seller) promises to transfer ownership of an item, while the other party (the buyer) promises to pay the price consisting of a sum of money as compensation for obtaining such ownership.

Read Also: Regime Transfer: Navigating Shifts in Indonesia’s Crypto Regulatory Authority

Based on the above regulations, the essential elements in a sale and purchase agreement are the object and the price, in which the object and price in the sale and purchase agreement must be clear. These two matters must be agreed upon by both parties for a sale and purchase agreement to occur. This is expressly regulated in Article 1458 of ICC that sale and purchase is deemed to have occurred between the parties, the moment both parties reach agreement on the object and its price, even though the object has not yet been delivered nor the price paid. In a sale and purchase agreement, there are obligations of the seller and the buyer. The main obligations of the seller are regulated in Article 1474 of ICC, namely:

• To deliver ownership of the goods being sold; and
• To warrant it, namely to guarantee peaceful and secure possession of the goods sold and the absence of hidden defects in the goods.

Meanwhile, the main obligation of the buyer is regulated in Article 1513 ICC, namely to pay the purchase price at the time and place determined according to the agreement.

Regarding objects, this is regulated in Book II ICC. Article 499 of ICC provides that according to the understanding of the law, what is called an object is every item or every right that can be owned by property rights. Article 503 of ICC explains that there are tangible items and intangible items. In addition to the ICC, Article 1 Number 4 of Law Number 42 of 1999 concerning Fiduciary Security (“Fiduciary Security Law”) provides that an object is anything that can be owned or transferred, whether tangible or intangible, registered or unregistered, movable or immovable that cannot be encumbered with a mortgage or hypothec. Based on the above provisions, it can be concluded that objects as the object of a sale and purchase agreement may also be intangible items.

Virtual Objects Crypto Assets

The definition of crypto assets is regulated in Article 1 number 7 of the Regulation of the Commodity Futures Trading Supervisory Agency Number 5 of 2019 concerning Technical Provisions for the Implementation of the Physical Market for Crypto Assets at the Futures Exchange (“Bappebti Regulation 5/2019”) which states that Crypto Assets are intangible commodities in the form of digital assets, using cryptography, peer-to-peer networks, and distributed ledgers, to regulate the creation of new units, verify transactions, and secure transactions without the intervention of other parties. Therefore, it can be concluded that crypto assets are intangible commodities.

The definition of Commodity is explained in Article 1 number 2 of Law Number 10 of 2011 concerning the Amendment to Law Number 32 of 1997 on Commodity Futures Trading (“Commodity Futures Trading Law”) namely, all goods, services, rights and other interests, and every derivative of commodities, which can be traded and become the subject of futures contracts, sharia derivative contracts, and/or other derivative contracts. It can be understood from the explanation above that one type of commodity in futures trading is goods. Referring to Bappebti Regulation 5/2019 and the definition of goods in the ICC as we have described above, it can be concluded that crypto is intangible goods.

Joshua A.T Fairfield, a technology law expert, explains that virtual objects are code created using computer systems and the internet that exist in cyberspace, formed in such a way and treated the same as objects that exist in the real world. Furthermore, Fairfield explains examples of virtual property such as e-mail accounts, websites, Uniform Resource Locators (URL), chat rooms or virtual chat rooms, bank accounts, online media accounts. Next, Dr. Richard A. Bartle states that virtual property is virtual objects, characters, virtual currency, virtual estates, accounts and other things which include: licenses, memberships, maps, and so forth.

The explanation regarding virtual goods is clarified by Peter Brown and Richard Raysman who are experts in technology law explaining that virtual goods are assets in the form of goods that have ownership that is valuable. Valuable means having economic value, so they can be exchanged for real money or through an exchange agreement with fellow virtual objects.

Based on the explanation above, it can be concluded that crypto assets are a form of virtual goods because they are intangible, have economic value that can be exchanged for real money, and can be granted ownership rights.

Legality of Crypto Asset Trading in Indonesia

The trading of Crypto Assets has been recognized in Indonesia as this is regulated in Bappepti Regulation Number 5/2019, Bappepti Regulation Number 11 of 2022 concerning the Stipulation of the List of Crypto Assets Traded in the Physical Crypto Asset Market (“Bappepti Regulation 11/2022”), and Bappepti Regulation Number 1 of 2025 concerning the Third Amendment to the Regulation of the Commodity Futures Trading Regulatory Agency Number 11 of 2022 concerning the Stipulation of the List of Crypto Assets Traded in the Physical Crypto Asset Market (“Bappepti Regulation 1/2025”).

Bappepti Regulation 5/2019 regulates the requirements for crypto assets that are permitted to be traded in Indonesia. These requirements are regulated in Article 3 paragraph (2) of Bappepti Regulation 5/2019, namely:

• Based on distributed ledger technology;
• In the form of utility Crypto Assets (utility crypto) or Crypto Assets backed by assets (Crypto Backed Asset);
• Having a market capitalization value (market cap) included in the top 500 (five hundred) largest crypto asset market capitalizations (coin market cap) for utility Crypto Assets;
• Included in the transactions of the world’s largest Crypto Asset exchanges;
• Having economic benefits, such as taxation, developing the information technology industry and the competency of experts in the field of informatics (digital talent); and
• Having undergone a risk assessment, including the risks of money laundering and terrorism financing as well as the proliferation of weapons of mass destruction.

The requirements set out in Article 3 paragraph (2) of Bappebti Regulation 5/2019 must be fulfilled cumulatively. In addition to meeting the requirements described above, a crypto asset is considered legal once it has been designated by the Head of Bappebti as part of the list of Crypto Assets traded in the Physical Crypto Asset Market.

The list of Crypto Assets is also regulated in Appendix A of Bappebti Regulation 1/2025, consisting of 545 Crypto Assets that are the result of an established evaluation. In addition, there are 851 Crypto Assets that are still in the process of proposed additions or reductions by Physical Crypto Asset Traders to Bappebti through the Crypto Asset Futures Exchange so that those crypto assets may be stipulated or reduced in the list of Crypto Assets traded in the Physical Crypto Asset Market.

The Validity of Cryptocurrency Sale and Purchase Agreements under Article 1320 KUHPerdata

A contract is valid and binding if it fulfills Article 1320 of ICC, namely:

• The consent of the parties;
• The capacity of the parties;
• A specific subject matter; and
• Lawful cause.

Article 1 number 6 of the Regulation of the Commodity Futures Trading Supervisory Agency Number 8 of 2021 concerning Guidelines for the Implementation of Trading of Physical Crypto Assets in the Futures Exchange (“Bappepti Regulation 8/2021”), the Physical Crypto Asset Market in the Futures Exchange, hereinafter referred to as the Physical Crypto Asset Market, is the physical market for Crypto Assets carried out using electronic facilities facilitated by the Futures Exchange or electronic facilities owned by the Physical Crypto Asset Trader for the sale or purchase of Crypto Assets. Based on this provision, the sale and purchase of crypto is an electronic sale and purchase agreement.

The validity of electronic contracts is regulated in Government Regulation of the Republic of Indonesia Number 71 of 2019 concerning the Implementation of Electronic Systems and Transactions (“GR No. 71/2019”). In Article 46 paragraph (2) of GR No. 71/2019, it is explained that an electronic contract is considered valid if:

• There is mutual consent between the parties;
• It is made by legally competent parties or those authorized to represent them in accordance with the prevailing laws and regulations;
• There is a specific subject matter; and
• The object of the transaction does not contravene laws and regulations, morality, or public order.

Referring to the provisions in Article 46 paragraph (2) of GR No. 71/2019 above, the validity requirements of an electronic contract are the same as the validity requirements of a contract as regulated in Article 1320 of ICC. Thus, a contract in the sale and purchase of crypto assets is deemed valid if it fulfills the validity requirements of a contract as stipulated in Article 1320 of ICC and Article 46 paragraph (2) of GR No. 71/2019. We will analyze whether the sale and purchase of crypto assets fulfills the validity requirements of a contract.

Agreement of the Parties

This purchase of crypto assets uses a concept similar to shares, in which the price is fluctuating, depending on supply and demand. From this, it can be understood that there are sellers and buyers, where in the Bappebti Regulation, the terms seller and buyer are replaced with crypto asset physical traders and crypto asset customers. Article 1 number 8 of Bappebti Regulation 5/2019 defines the meaning of a crypto asset physical trader as a party that has obtained approval from the Head of Bappebti to conduct Crypto Asset transactions either on its own behalf and/or facilitate the transactions of Crypto Asset Customers. Then in Article 1 number 9 the definition of a Crypto Asset customer is explained as a party that uses the services of a Crypto Asset Trader to buy or sell Crypto Assets traded in the Physical Crypto Asset Market.

Consent itself has the meaning of a declaration of intent that is agreed upon or overeenstemende wilsverklaring from the parties. It must also be understood that from the declaration of consent there is an offer by the offering party or offerte and the acceptance of the offer by the other party or acceptatie. In addition, consent also has the meaning that the parties agree on the matters contained in the agreement made, in which what one party desires must be approved or desired by the other party.

The crypto asset sale and purchase agreement is an agreement that meets the first requirement, namely consent. This is because in a crypto asset sale and purchase agreement, the customer and the crypto asset trader must first approve and agree before any crypto transaction occurs. Furthermore, the purchase can take place when the customer has determined the amount of crypto assets to be purchased, then confirms the transaction. After that, the crypto assets will enter the customer’s wallet according to the amount purchased. In this case, consent occurs after the transaction confirmation is carried out. In this regard, everything is in the hands of the customer, meaning that the crypto asset trader only offers the amount and the price that must be paid if the customer wishes to buy the crypto asset. Therefore, consent occurs when the offerte is accepted and approved by the customer, resulting in the crypto transaction.

Capacity of the Parties

The capacity of the parties in a crypto asset sale and purchase agreement is regulated in Bappepti Regulation 8/2021. The capacity of crypto asset customers is regulated in Article 35 paragraph (6) of Bappepti Regulation 8/2021 with the following requirements:

• At least 17 (seventeen) years old;
• possessing an Identity Card for Indonesian citizens, or a passport and an identity card issued by the Customer’s country of origin (KITAP) or a Limited Stay Permit Card (KITAS) for foreign citizens; and
• using their own funds or Crypto Assets and not funds or Crypto Assets originating from or belonging to another person, or proceeds of criminal acts, money laundering, terrorism financing, and/or weapons of mass destruction.

There is a difference regarding the age limit for legal capacity as regulated in the legislation. Article 330 of ICC clearly stipulates that a person is not yet an adult if he has not reached 21 years of age and has never been married before. In the Marriage Law Article 47 paragraph (1), Article 39 paragraph (1) of Law No. 2 of 2014 on the Amendment to Law Number 30 of 2004 concerning the Office of Notary stipulates that a person who is already an adult is someone who is 18 years old or already married. In this context, there is a difference, namely 17 years old as explicitly regulated in Article 35 paragraph (6) of Bappebti Regulation 8/2021, and 18 years old. Based on the explanation above, it is understood that there is a difference in legal capacity between Article 330 of ICC and the legal capacity under Article 35 paragraph (6) of Bappebti Regulation 8/2021.

Moreover, the capacity of crypto traders is regulated in Article 40 of Bappepti Regulation 8/2021 with the following requirements:

• Capital of IDR 50 billion and equity of IDR 40 billion;
• Established as a Limited Liability Company;
• Member of a Futures Exchange and Clearing House;
• Have a segregated account;
• Have a minimum organizational structure (IT, Audit, Legal, Customer Complaint Unit, Client Support, Accounting);
• Possesses an online trading system connected to the Futures Exchange and Clearing House;
• Standard Operating Procedures (SOPs) minimum mechanisms for crypto asset storage, supervision, internal control, and risk management;
• Minimum 1 staff member certified as a Certified Information Systems Security Professional (CISSP); and
• Standardized system.

One of the requirements for crypto traders is that they must be a member of an exchange and a clearing member. To become a member of a futures exchange and clearing also has requirements as regulated in Article 5 paragraph (2) of Bappepti Regulation 8/2021. The requirements for becoming a futures exchange are as follows:

• Paid-up initial capital of Rp 500 Billion, and Equity of 80% of the paid-up initial capital;
• Have a Physical Market Committee;
• Have adequate facilities and trading infrastructure;
• Have a supervision and reporting system; and
• A minimum of 1 employee certified as a Certified Information Systems Security Professional (CISSP), and 1 employee certified as a Certified Information Systems Auditor (CISA).

The requirements for becoming a futures clearing house are regulated under Article 9 of Bappebti Regulation No. 8 of 2021 as follows:

• have paid-up capital of at least IDR 500 billion;
• maintain equity of at least 80% of its paid-up capital;
• have a reliable guarantee and settlement system that is connected to the Futures Exchange, Crypto Asset Traders, and Crypto Asset Storage Operators; and
• have regulations and rules for the Physical Crypto Asset Market.

In the sale and purchase of crypto assets, both traders and customers are required to fulfill the requirements as we have outlined above. The non-fulfillment of the competency requirements results in the agreement not meeting the subjective validity requirements of an agreement, so that one of the parties may request the annulment of the agreement.

A Specific Subject Matter

A specific object is interpreted to mean that in an agreement there must be a specific object or bepaald onderwerp that can at least be determined. The regulation of property law in Indonesia uses a closed system, which means that a person cannot create new property rights other than those already established by law. Therefore, from the explanation above, it can be understood that this requirement focuses on the object, wherein the object must be one that is in accordance with the existing laws and regulations in Indonesia, and its nature must be determinable.

Crypto assets are objects recognized under Indonesian legislation. The trading of crypto assets is regulated in several laws and regulations, namely the Futures Trading Law as amended by Law Number 10 of 2011, Government Regulation Number 49 of 2014 concerning the Implementation of Futures Trading, Minister of Trade Regulation Number 99 of 2018 concerning General Policies for the Implementation of Crypto Asset (Crypto Asset) Futures Trading, Bappebti Regulation 5/2019 as amended by Bappebti Regulation Number 9 of 2019, Bappebti Regulation Number 2 of 2020, and Number 3 of 2020, Bappebti Regulation 2/2019, Bappebti Regulation 7/2020, and Bappebti Regulation 1/2025.

However, it must be understood that not all crypto assets can be traded. Crypto assets that may be traded are only those listed with Bappebti, which at this time refers to Bappebti Regulation 1/2025. Aside from the crypto assets that are listed, other crypto assets do not have legality to be traded in Indonesia, because they do not meet the requirements for crypto assets based on the prevailing laws and regulations.

The non-fulfillment of the validity requirement of an agreement regarding a specific object result in the non-fulfillment of the objective requirements of an agreement. This causes the agreement to be null and void by operation of law and therefore deemed as never having existed from the beginning.

A Lawful Cause

A lawful cause is regulated in Article 1337 of ICC. Article 1337 of ICC provides that a cause is prohibited if it is prohibited by law, or if it is contrary to good morals or public order. Thus, an agreement must not be contrary to law, morality, and public order.

With the clear regulation in several Bappebti regulations as we have described above, the sale and purchase of crypto assets does not violate legislation, public order, or morality. However, in this case it must be ensured that the sale of crypto assets involves crypto assets that are legal and have been recognized by the Head of Bappebti. Not only the crypto assets themselves, but traders and customers who conduct purchases as well as the futures market exchange are also required to comply with the requirements in accordance with Bappebti Regulation 5/2019.

Therefore, all crypto sales that are not in accordance are considered illegal crypto sales and therefore it gives rise to an invalid agreement, because it does not fulfill the requirement of a lawful cause, whereby the agreement does not meet the objective requirements.

Case Analysis

Supreme Court Decision Number 2723 K/Pdt/2010 jo. Supreme Court Decision Number 460 PK/Pdt/2013

The case between a commodity futures trading brokerage company as the Plaintiff and Mr. Njo Winyoto Gunawan and Mrs. Tjan Intan Megawati as Defendant I and Defendant II. Defendant I and Defendant II agreed with the Plaintiff to conduct buying and selling activities of commodity futures trading through Futures Contracts and bound themselves in the Customer Mandate Agreement. With the execution of the account opening agreement as the implementation of the futures contract trading transaction agreement and the Customer Mandate Agreement, Defendant I and Defendant II placed their funds in the amount of USD 10,000 in each account. The investment to be carried out is a futures contract investment in loco (gold) commodities.

The Plaintiff was then found to have transacted the investments of Defendant I and Defendant II on a foreign futures exchange namely Loco London Gold which is not included in the List of Exchanges determined by Bappebti. Meanwhile, Article 13 of Futures Trading Law stipulates that the transmission of customer orders to foreign futures exchanges may only be carried out to futures exchanges whose list is determined by Bappebti.

The basis of the Plaintiff’s lawsuit is that the Plaintiff suffered losses in the futures contract transactions because the remaining equity of Defendant I and Defendant II became negative, as Defendant I and Defendant II were unable to provide additional funds due to a significant increase in the commodity price to meet the initial margin in each account.

In this case, it is known that Defendant I had received profits from the loco (gold) transactions in the amount of approximately IDR 80,000,000 (eighty million Rupiah). In its cassation memorandum, the Plaintiff argued that although Loco London Gold had not yet been registered with Bappebti, Defendant I and Defendant II had already agreed to the agreement voluntarily and had enjoyed the results of the said transactions.

In its decision, the Panel of Cassation Judges considered the following:

“The Plaintiff has carried out the mandate not in accordance with the provisions of Articles 13 and 14 paragraph (2) of Commodity Futures Trading Law namely by transacting it on a foreign futures exchange Loco London Gold which is not included in the list determined by BAPPEBTI as evidenced in the Decision of the Commodity Futures Trading Regulatory Agency No. 32/BAPPEBTI.KP/XI/2001 concerning the Determination of the List of Foreign Exchanges and Foreign Futures Contracts and when connected with the validity requirements of an agreement under Article 1320 of ICC, the agreement between the Plaintiff in the Convention and the Defendants in the Convention has violated the law, so that the agreement violates the objective requirements and must therefore be declared null and void by operation of law.”

In the case above, the Plaintiff violated the fourth element, namely a lawful cause. The trade conducted by the Plaintiff breached Law No. 32 of 1997, thereby violating the objective requirement and is consequently declared null and void by law. The panel of judges in this case explicitly considered that, regardless of the parties’ agreement and even if one party had received a benefit, if the agreement violates the fourth element of the requirements for a valid contract, the agreement is null and void by law or is considered never to have existed.

Conclusion

Crypto assets are a commodity that can also be referred to as virtual goods or intangible goods. As a good, crypto assets can also serve as an object to be traded. Therefore, an agreement arises. The agreement for the sale and purchase of crypto assets normatively constitutes a valid and lawful agreement, if it complies with and fulfills the validity requirements of agreements under Article 1320 of ICC and the validity requirements of electronic agreements under Article 46 paragraph (2) of GP No. 71/2019, namely:

• fulfilling the requirement of consent, where consent occurs when the customer has determined the number of crypto assets to be purchased, then confirms the transaction. After that, the crypto assets will enter the customer’s wallet in accordance with the amount purchased;
• the legal subjects performing the agreement must be competent based on Bappepti Regulation 5/2019;
• fulfilling the requirement of a specific object, namely that crypto assets are a clear good that can indeed be traded and constitute goods that comply with Indonesian legislation; and
• fulfilling the requirement of a lawful cause, where the agreement for the sale and purchase of crypto assets must not conflict with law, public order, or morality.

The sale and purchase agreement of crypto assets can be said to be a valid and binding agreement, however, it needs to be understood that there are many possibilities and loopholes for illegal crypto transactions to occur. Therefore, it is necessary for all crypto asset customers to carefully observe and understand Bappepti regulations regarding crypto before conducting crypto transactions.

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Sources:

• ICC
• Fiduciary Security Law
• Bappebti Regulation 5/2019
• Commodity Futures Trading Law
• Bappepti Regulation 11/2022
• Bappepti Regulation 1/2025
• Bappepti Regulation 8/2021
• GR No. 71/2019
• Supreme Court Decision Number 2723 K/Pdt/2010 jo. Supreme Court Decision Number 460 PK/Pdt/2013