Cryptocurrency Research Articles

Crypto Assets Indicators and their Effect on the Market Capitalization: A Panel Data Analysis

Crypto Assets Indicators and their Effect on the Market Capitalization: A Panel Data Analysis

Technological Innovation of the Crypto-Asset Financial Sector in Indonesia after Law Number 4 of 2023 Concerning the Development and Strengthening of the Financial Sector

Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (UUP2SK) has provided changes to all regulatory and supervisory authorities over the operationalisation of cryptocurrencies, which were previously in the hands of the Commodity Futures Trading Supervisory Agency (Bappebti) to the jurisdiction of the Financial Services Authority (OJK). After the enactment of UUP2SK, the authority to regulate and supervise crypto assets is now under the purview of OJK, with the transition of taking over all responsibilities related to crypto assets, but there is no regulation that regulates in detail the procedures for the transfer of authority

Cryptocurrency Investment in Indonesia

Objective - Different countries have different policies towards cryptocurrencies. In Indonesia, cryptocurrency is prohibited as a means of payment or transaction. The prohibition is stated in Bank Indonesia Regulation (PBI) Number 18/40/PBI/2016 concerning the Implementation of Payment Transaction Processing. However, cryptocurrencies are recognized as long-term commodities or investment assets, so their supervision is carried out by the Commodity Futures Trading Supervisory Agency (bappepti) and regulated in Bappebti Regulation No. 7 of 2020 concerning the Determination of the List of Crypto Assets that Can be Traded on the Crypto Asset Physical Market. This study aims to analyze the differences in return and risk on the 5 cryptocurrencies with the largest market capitalization in Indonesia. Methodology/Technique - This research uses quantitative methods with a descriptive approach, and secondary data is used. The population in this study consisted of 383 cryptocurrencies that were legal and registered with Bappepti from 2020 to 2022. The sample was determined using purposive sampling to determine the top 5 cryptocurrencies with the largest market capitalization during the observation period from January 2020 to September 2022. The data analysis technique used the Kruskal-Wallis test. Findings - The results showed no significant differences in return and risk between Bitcoin, Ethereum, Tether, BNB, and USD coins. Empirically, this study proves that each cryptocurrency has the same risk and return. Novelty - This research was conducted in Indonesia with regulations that may differ from other countries towards cryptocurrencies. As a long-term commodity investment asset, this study finds empirical evidence that each cryptocurrency has the same risk and return. Type of Paper: Empirical JEL Classification: G11; G18; G28 Keywords: Cryptocurrency; Investment; Return; Risk; Bappepti Reference to this paper should be referred to as follows: Dewi, D.M; Faizal, I; Sambe, T.A. (2024). Cryptocurrency Investment in Indonesia, Acc. Fin. Review, 9(1), 32 – 41. https://doi.org/10.35609/afr.2024.9.1(1)

Perlindungan Hukum Terhadap Investor Dalam Kegiatan Investasi Digital Di Indonesia

The purpose of this research is to determine the legal protection for investors in digital investment activities in Indonesia, namely Law No. 8 of 1999 concerning Consumer Protection, Law No. 25 of 2007 concerning Capital Investment, Law No. 11 of 2008 concerning Information and Electronic Transactions (ITE), and BAPPETI Regulation No. 7 of 2022 concerning Determining the List of Crypto Assets That Can Be Traded. This research uses a type of empirical normative research. The study results and discussion of digital investment, such as cryptocurrency, create a legal relationship between investors and traders with rights and obligations regulated by CoFTRA regulations and the Currency Law. Investors have the right to clear information, benefits, and are obliged to understand risks and regulations. Traders are entitled to compensation and must provide information and protect investors' assets. The Investment Law and other rules protect investors, including the Consumer Protection Law and the Information and Electronic Transaction Law. This protection is essential to ensure investor safety from online investment risks, including illegal investments. The strategies to provide legal protection for investors are education, strengthening regulations and supervision, and implementing the precautionary principle. Law enforcement is also essential, including dispute resolution, criminal prosecution, and compensation. Firm and effective law enforcement can help prevent and eradicate illegal investment practices, protect, build trust and security, and encourage digital economic growth in Indonesia.

Криптовалюты: учет и аудит в цифровой экономике

The article examines the impact of cryptocurrencies on the field of accounting and auditing, emphasizing the need to update existing methodologies in light of the digitalization of the economy. The development of the digital economy leads to the widespread use of electronic currencies. In the modern world, cryptocurrency is not only relevant as a form of electronic payments, but also promising for investments in the international market. In recent years, there has been an unprecedented increase in interest in cryptocurrencies as an innovative financial instrument, which has caused significant changes in traditional accounting and auditing approaches. The development of blockchain technology and an increase in the volume of transactions using cryptocurrencies stimulate the need to adapt accounting systems and audit procedures to new economic conditions. The article is dedicated to analyzing the advantages and disadvantages of cryptocurrencies, as well as developing new audit procedures adapted to the specifics of cryptocurrency transactions. The relevance of the topic is determined by the rapid penetration of crypto assets into the financial world and the challenges they pose for traditional accounting systems. It also necessitates the adaptation of accounting standards and auditing practices to new economic realities. The work uses a comprehensive approach, including the analysis of academic sources, regulatory documents, as well as expert opinions and practical case studies. The results show that the integration of cryptocurrencies requires standardization of accounting and updating of audit approaches, as well as raising the level of specialists' knowledge. The article offers recommendations that contribute to increasing the transparency of financial operations and strengthening investor confidence. This research is of interest to professionals in the field of financial accounting and auditing, as well as researchers studying the impact of digital technologies on economic processes.

A Proposed Framework of Islamic Inheritance and Estate Planning of Digital Assets: The Malaysian Case of Crypto Assets

Purpose — This paper aims to propose a framework of Islamic estate planning of crypto assets in Malaysia. Design/Methodology/Approach — The paper used an interview method to obtain information related to Islamic estate planning of crypto assets. Semi-structured interviews were conducted with informants of five different backgrounds including lawyers, estate planners, Sharīʿah experts, digital asset exchange (DAX) operators, and crypto owners. The data gathered was analysed using thematic analysis to construct the framework of Islamic estate planning of crypto assets. Findings — The paper identifies important prerequisites of Islamic estate planning of crypto assets. Further, a framework of estate planning of crypto assets is developed based on the information gathered from all related stakeholders. It is posited that the Securities Commission Malaysia (SC) has a vital role to play in safeguarding the financial interests of digital asset holders and their beneficiaries and that implementation of this framework would align with and uphold the objectives of Sharīʿah (maqāṣid al-Sharīʿah). Originality/Value — This paper presents a framework of Islamic estate planning of crypto assets, it being one of the first studies to do so from the Islamic perspective, which is not only useful and relevant for Malaysians (Muslims) but also for other countries. Research Limitations/Implications — The first limitation of the paper is that the framework is developed based on a qualitative method. There is no evidence of its validity, which is a gap that can be explored in the future. Second, it involves the perceptions of five types of respondents, which may be broadened to other related stakeholders such as regulators—i.e., Securities Commissions or any ministries—in future studies.

Financial contagion in cryptocurrency exchanges: Evidence from the FTT collapse

To what extent does the collapse of a digital token spread contagion across cryptocurrency markets? How do markets incorporate information in this turbulent setting? We examine contagion effects across major digital exchanges during the collapse of the FTX exchange and its token, FTT. We find evidence of contagion across crypto exchanges. We also examine the information cascade effects of other crypto assets on FTX when nearly all withdrawals were prohibited. We find abnormal returns for major assets, indicating a flight to safety from less to more authoritative digital assets. The implications for traders, exchanges, and policymakers are discussed.

Cryptoeconomics: Financial Market Security Aspects and Implications for Managerial Accounting

"The development of modern information technologies and the processes of globalization are key factors for the emergence and spread of virtual currency. The legal status of cryptocurrency is still uncertain. It is considered both as a modern means of payment and as a speculative tool for illegal activities. However, despite such diametrically opposed interpretations, the fact that economic realities are constantly changing is unconditional. The IFRS reporting system is no exception, which should adapt to new challenges in a timely manner and take into account the need to disclose information about new progressive elements as much as possible. The article aims to analyze the economic and financial essence of cryptocurrencies, assess the phenomenon of the crypto economy and its impact on the financial market and monetary policy, as well as to outline appropriate implications for the corporate level – namely, for management accounting. The methodology is based on a theoretical analysis of cryptographic protocols and tools for investment and macroeconomic analysis, some approaches of economic theory. It is shown that although today cryptocurrency is a speculative, high-risk instrument, cryptoeconomics is increasingly integrating into the global financial market, while the potential risks of this process still outweigh its benefits. Accordingly, at the micro-level, management accountants must understand the related risks and be able to explain the implications to the management team and the board of directors. The originality of research consists of an attempt to combine the analysis of macro- and micro-implications of emerging crypto economics based on an economic theory foundation."

Tax Regulations On Cryptocurrency Transactions In Indonesia

This study explores the evolving landscape of cryptocurrency taxation in Indonesia, focusing on regulatory developments and challenges. Tracing the trajectory from the introduction of Bitcoin in 2009 to the establishment of a formal crypto exchange in 2023, this research emphasizes the government's commitment to regulate and facilitate crypto asset trading. Despite this progress, challenges such as regulatory uncertainties, security concerns, necessitating a profound understanding of cryptocurrency dynamics to navigate the global financial landscape. This research focuses on exploring Indonesia's regulatory response, particularly in taxation, employing a qualitative descriptive methodology that integrates primary data from legal frameworks and secondary data through literature reviews, document analyses, and interviews with cryptocurrency traders and tax officials. This study contributes not only to academic discourse but also provides insights for fostering the growth of the cryptocurrency ecosystem while managing potential tax-related risks.

Innovations in Blockchain for Crypto Assets and Exchanges

Innovations in Blockchain for Crypto Assets and Exchanges

The Rise of Bitcoin ETFs and its Impact on Existing Crypto Currency Exchanges

The emergence of Bitcoin Exchange-Traded Funds (ETFs) marks a significant milestone in the evolution of cryptocurrency investment. This research paper investigates the potential impact of Bitcoin ETFs on existing cryptocurrency exchanges, focusing on liquidity dynamics and institutional investment trends. By examining the mechanisms through which ETFs may draw liquidity away from direct Bitcoin exchanges, this study aims to shed light on the evolving landscape of cryptocurrency trading. Additionally, the paper explores the potential for Bitcoin ETFs to attract increased institutional investment in the cryptocurrency market, analyzing the factors that may contribute to this trend. Through a comprehensive analysis of market data and expert insights, this research provides valuable insights into the evolving relationship between Bitcoin ETFs and traditional cryptocurrency exchanges.

Non-fungible tokens and metal markets: time-varying spillovers and portfolio implications

ABSTRACT The linkage between the metal market and crypto assets is a topic of concern. Utilizing a novel TVP-VAR framework, this study examines the volatility transmission between NFTs and precious/industrial metals. The results show strong connectivity, with most NFTs being net transmitters, and industrial metals being mostly net spillover recipients. Moreover, the connectivity was affected by the COVID-19 epidemic and the Russia-Ukraine War. Considering the potential reference value that this empirical fact may bring to market participants, this paper divides the time samples and uses the DCC-GARCH t-copula method to analyse the portfolio construction of every sub-sample. The research investigates and compares the hedge ratio, optimal weights, and hedging effectiveness of NFT-industrial metals and NFT-precious metals. These findings can bring potential inspiration to investors, market regulators, and policymakers.

Analysing Risk and Returns: A Study on Selected Crypto Currencies

The present study focuses on "Crypto currency" also called digital money existing on the block chain. It refers to the transactions related to computer-generated currencies which are secured by crypto currencies. The data considered in the project is from 2017 to 2023. The objective of this research is to compute and compare the risk and return performance of the selected crypto. In India, crypto currency investment carries a high degree of risk due to its uncertain legal status and lack of regulation. The Reserve Bank of India has issued warnings about the potential financial, operational, legal, customer protection, and security related risks associated with dealing in crypto currencies. However, the potential for high returns has also attracted many investors. To make informed decisions, Indian investors should conduct thorough research on the market, stay up-to-date on regulatory changes, and diversify their investment portfolios. It is also essential to have a clear understanding of one's risk tolerance and not invest more than one can afford to lose. In conclusion, by taking a balanced and well-informed approach to invest in crypto currencies, Indian investors can make effective decisions that weigh both the potential risks and returns.

INTERNET USERS’ PERCEPTION OF THE PREVALENCE OF ONLINE INVESTMENT FRAUD AND VICTIMISATION IN NIGERIA

This study investigated the prevalence of online investment fraud and victimisation among internet users in Nigeria, focusing on sociodemographic characteristics, investment behaviours, victimisation. experiences, and perceptions of fraud risk factors. The study employed a cross-sectional survey design, utilizing Google Forms for data collection and convenience sampling to recruit 164 participants from Ilorin, Kwara State. The study adopted the Routine Activities Theory (RAT) as theoretical framework. Findings reveal that a majority of respondents are young individuals with tertiary education, indicating their susceptibility to online investment fraud due to limited financial experience and a desire for quick financial gains. Notably, over half of the participants actively engage in online investments. In addition, family and friends' recommendations and the pursuit of financial freedom influencing investment decisions significantly. However, a substantial proportion of investors report falling victim to online investment fraud, predominantly through Ponzi/pyramid schemes, crypto currency scams, and forex trading scams. Financial losses vary among victims, with factors such as lack of regulation, poverty, unemployment, and insufficient training on fraud prevention contributing to vulnerability. Statistical analysis indicates a significant relationship between investment experience and the perception of high returns as a risk factor for fraud victimisation. These findings underscore the urgent need for regulatory measures, public awareness campaigns, and educational initiatives to mitigate the risks associated with online investment fraud in Nigeria.

Exploring the development of regulatory framework for crypto assets in South Africa

This paper explores the need for, and forms of regulatory framework and laws established to guide and control the growing number of individuals and firms investing and trading in crypto assets in South Africa. The step taken to regulate crypto assets was necessitated by the 2021 report of the Paris-based intergovernmental organisation referred to as the Financial Action Task Force (FATF) which revealed that there is apparent lack of crypto assets regulation in South Africa. In rising to this challenge, the South African regulatory authority known as the Financial Sector Conduct Authority (FSCA) in October 2022 indicated that crypto assets are digital representation of value and therefore could be categorised as financial product which are to be subjected to FSCA regulations with reference to Section 1(h) of the Financial Advisory and Intermediary Services Act (FAIS). The method adopted was to review the regulatory framework and laws governing crypto assets in South Africa. It was found that relevant regulatory framework and laws are needed to provide adequate protection for the investing public and to provide avenues for the sustainability and stability of the crypto assets business sector. The paper concludes that providing an efficient regulatory framework for crypto assets in South Africa will assist in limiting the risk of volatility and cyber-attacks to which individuals and firms trading and/or investing in crypto assets are exposed to. Moreover, an awareness of various regulatory controls and laws governing investments in crypto assets will ensure that individuals and firms in this sector tread in the path of caution.

Legal Protection For Cryptocurrency Investors In Trading Cryptocurrencies As Crypto Assets According To Civil Law In Indonesia

Crypto is a non-wuud commodity that is digital using cryptography. The legality of crypto assets in Indonesia has not received firm regulation in their use, and there is a need for a supervisory body that regulates all transaction activities for legal protection for investors in trading digital assets. The research method used in this study is to use normative juridical research methods, using a statutory approach (statute approach) and a conceptual approach (conceptual approach). The result of the discussion of this study is that for the legality of crypto assets, Bank Indonesia places them as digital money so that they are prohibited as a means of payment, while the Ministry of Trade places them as digital assets so that they are allowed to be traded on the Futures Exchange. Normatively, there is still opposition in looking at crypto money. Legal protection of investors who make crypto asset buying and selling transactions get legal protection for losses that can be caused both criminally, namely losses caused by cyber crime and civil losses due to Unlawful Actions.

The evolution of the debt—equity doctrine in the light of financial instruments’ digitalization

The article outlines the basics for using the debt—equity dichotomy in the financial instruments typology and analyzes the contradictions and short-comings of the existing approach to classification. It is shown that the “trap” of the debt—equity dichotomy comes from the path dependence process, mainly formed by the inertia of the tax system. It is noted that the applying of the debt—equity dichotomy entails a formalist approach to classification, which does not bring closer to the clarity of the delimitation of contracts according to the criteria of risk and reward distribution, and restrictions on post-contractual opportunism. Arguments are given to explain why the foundations of the debt— equity doctrine may be weakened in relation to crypto assets. This is supported by the fact that the genesis of digital assets occurs in a specific technological context, which determines its own criteria and framework for the typology of instruments. Another set of arguments comes from the fact that the world of crypto assets appears to be coherent with the specific environment of venture capital investment. This environment, in turn, arouses the demand for overcoming the debt—equity dichotomy to implement the tasks of risky investors and structuring the relations of the parties involved in projects. This demand has now led to the emergence of a number of instruments that cannot be classified as either debt or equity, including those using the construct of tokens or contractual agreements used by crowdfunding platforms. Overall, the intellectual effort that previously satisfactorily explained companies’ choices of financing styles and modes is now insufficient to reconcile capital structure theories with the practice of digital asset financing.

Are metaverse coins more prone to geopolitical risk than traditional crypto assets?

The present research explores the nexus of geopolitical risk (GPR) with metaverse coins and traditional crypto assets. We apply wavelet-based techniques to capture their time-varying relationships and casual nexus at different scales. Based on 776 observations from November 04, 2020, to December 19, 2022, for each time series, we find that GPR does not impact metaverse coins in the short run. Conversely, some of the traditional crypto assets are influenced by the GPR in the short, medium, and longer runs. Metaverse coins are slightly less prone to GPR than traditional crypto assets. The results can be utilized for risk mitigation and investment diversification.

Determinants of Investment Intentions in Millennial Generation

Investment intention is inseparable from the information and literacy obtained so that it creates a perception because investing, in addition to generating returns, will also raise risks. For this reason, this study aims to look at the determinants of investment intention in the millennial generation. The related factors selected were financial literacy and risk perception. This research was conducted using a survey method through an online questionnaire. The sample in this study is the millennial generation with at least one type of investment (gold, stocks, bonds, savings, mutual funds, time deposits, forex, crypto assets, property, and others). Data were analyzed using regression analysis. The results of the study show that risk perception and financial literacy have a significant effect on investment intention. Keywords: investment intention, millennial generation, financial literacy, risk perception

Rug Pull Cryptocurrency Case Analysis in the Perspective of Indonesian Business Law

Developments in financial technology continue to produce various new products, especially those related to investment in digital assets, or crypto assets. This study investigates the issue of consumer protection under Law No.8/1999 in crypto asset investment. This research uses normative juridical research methods. Juridical aspects such as theories, norms and regulations relating to investment in crypto assets are obtained from literature, books, online media and other sources related to the research subject, namely consumer protection against investment activities in crypto assets. This study tries to explain what reasons are driving the change and urges the government to create new, stricter regulations to protect crypto asset investors.