A lot of our Coinomers are in Indonesia. In the past weeks, we had to cancel the deposit channel via Bank Transfer VA Mandiri and therefore find this the perfect timing to go over some safety tips for our users.
Many investment offers are circulating with attractive returns, but how would you determine if an investment option is safe, legitimate, and not a scam? Hopefully, this article will help you navigate the variety of investment offers out on the market
New Scams Under the Guise of Investment
Since the pandemic, many in Indonesia have begun seeking alternative forms of passive income, investing in financial instruments such as stocks, crypto, mutual funds, and many others.
However, many new investors start investing without sufficient due diligence or understanding of the investment landscape. Many are easily tempted by investments that offer high returns with no previous financial knowledge or a comparative basis. Unscrupulous elements take advantage of this mindset to offer fake investments to the public.
For example, if you have suddenly been invited into a telegram group chat that contains people depositing funds to invest, it is most likely a scam designed to take your funds. These bad-faith actors take advantage of inexperienced or learning investors by offering them easy ways to invest and unrealistically high returns.
In addition to telegram investment groups, there are trading robots, binary options, and others.
Most Common Investment Types to Be Wary Of:
- Online Investment Groups: Encountered when invited into a group chat on messaging platforms such as Telegram. Once you are in, the admin will send fake messages to invest and positive reviews of people making transfers. This creates an image that there are many investing in the group. However, money transfers from the group are often directed into the personal account of the scammer. It is likely a scam if you suddenly are invited into investment groups on Telegram or WhatsApp.
- Robot Trading Forex: Trading robots or Expert advisors are algorithmic software that sends trading signals. Many professional forex investors use programs like this to assist them in trading. Be wary if you are offered trading robot services that guarantee very high returns as many illegal trading robots are circulating online. There are no trading robots available to the public that can guarantee high returns; they cannot work alone and are mostly a trading tool used to monitor the market. Investors should be careful of fraudulent instruments used to deceive potential investors.
- Binary option: Binary options are online trading instruments that work by requiring traders to predict or guess the price movement of an asset within a specific time. Traders can choose the assets to trade, such as stock, indices, cryptocurrencies, to commodities. Once you have determined the asset to be traded, you must risk some of your capital to make a potential profit. Binary options require strong market knowledge and are very unpredictable. Most of these service providers act in bad faith and are illegal in Indonesia.
Official OJK Stance
A survey conducted by the Financial Services Authority (OJK) of Indonseia in 2019 revealed that the level of public literacy was at 38%, whereas public financial inclusion was 78%. The low level of public literacy and high levels of financial participation cause many to be entangled in inappropriate investments or scams.
The Financial Services Authority (OJK) forbids financial service institutions ranging from banking, insurance, and multi-finance corporations to facilitate cryptocurrency (crypto money). The prohibition includes using, marketing, and facilitating crypto assets trading. Recently, Bank Mandiri’s deposit services have been withdrawn from several existing crypto exchanges.
“OJK firmly prohibits crypto-facilitating financial service institutions. OJK has strictly prohibited financial service institutions from using, marketing, and or facilitating trading of crypto assets,” explained the Chairman of the OJK Board of Commissioners, Wimboh Santoso, in an OJK Instagram post.
OJK also appeals to the public to be aware of alleged fraudulent crypto investment Ponzi schemes. The public must understand the risks of crypto assets because they are a type of commodity with fluctuations in value that can go up and down at any time. “This is a warning to the public that every financial investment must be properly understood regarding the benefits, costs, and risks,” explained OJK Deputy Commissioner for Public Relations and Logistics Anto Prabowo.
Please note that crypto assets have been recognized and can be traded in Indonesia but are under the Commodity Futures Trading Authority (CoFTRA). Crypto Asset Traders who CoFTRA has recognized can legally trade crypto assets. However, crypto-assets cannot be used as a means of payment in Indonesia.
How to avoid illegal or scam investments?
Before investing, it is better to do due diligence on the company or investment instrument offered. Investments are not a get-rich-quick strategy; first, learn what is offered and whether it suits your long-term plans and investment goals.
Things to consider in choosing an investment instrument:
- Pay attention to whether the company’s background is trusted.
- Is the yield offered reasonable, or does it look too good to be true?
- Existing risks must be considered to suit your investment plan. Always invest with money that does not interfere with your cash flow and overall welfare.
- Does your counterparty use an officially registered company account?
We recommend choosing an investment provider such as Coinomo that conducts in-depth research on offered investment plans and only offers safe investment plans.
To invest in Coinomo, you can transfer crypto assets from your crypto wallet or use a credit card. Coinomo always strives to provide an easy and pleasant experience for users; therefore, the Coinomo team will soon add more deposit options for our users’ convenience.