Arrests of ‘crazy rich’ Indonesians spotlight investment risks


Medan, Indonesia – Indonesian influencers Indra Kesuma and Doni Salmanan lived the kind of life most people can only dream of.

On his now-deleted Instagram, 25-year-old Kesuma, aka Indra Kenz, regularly posted photos of himself posing next to luxury cars and sporty designer watches and clothing.

During an appearance on the TV show, Crazy Rich Indonesia, in January, Kesuma, from Medan in North Sumatra, treated the audience with stories of buying $30,000 T-shirts, while Bandung resident Salmanan, 23, boasted about donating $100,000 to an online gamer simply because he had nothing better to do.

Kesuma and Salmanan attributed their extravagant wealth to successful trading on Binomo and Quotex, respectively, binary options trading apps that allow users to bet on a stock’s rise or fall within a strict time limit for a chance to win a fixed amount of money.

But while Kesuma and Salmanan claimed to have made their fortunes from the apps, dozens of others say they lost huge sums in what Indonesian authorities are calling an elaborate financial scam.

In February, just a month after discussing his self-made wealth on national television, Kesuma traded his designer T-shirts for an orange jumpsuit when he was arrested by Indonesian police. The police arrested Salmanan the following month.

Both men are now charged with fraud, online gambling, money laundering and violating Indonesia’s Electronic Information and Transactions Act (ITE) by spreading so-called fake news. At press conferences in March, Kesuma and Salmanan apologized for their actions and expressed hope that their arrests would serve as a warning to other potential investors.

Kesuma’s lawyer did not respond to a request for comment and Al Jazeera’s attempts to reach Salmanan’s legal representative were unsuccessful.

Doni Salmanan appeared in the TV show Crazy Rich Indonesia earlier this year [File: Instagram @donisalmanan_real]

“We need to look at more than just Indra Kenz and the Binomo case,” Adinova Fauri, an economist at the Center for Strategic and International Studies (CSIS), told Al Jazeera.

“The practice of illegal online trading platforms in Indonesia continues to increase, even as the government continues to try to block them.”

According to police reports from the alleged victims, problems with the apps started as soon as users signed up using Kesuma and Salmanan partner codes.

“The ‘trading’ mechanism Binomo used was clearly unreasonable from the start,” Vinsensius Sitepu, a financial journalist and private investor, told Al Jazeera.

“The data varied between users, the time frame to choose whether stock prices would go up or down was ridiculously short. There were user accounts that were suddenly closed, funds could not be withdrawn, and so on,” Sitepu said.

“The Binomo system seemed designed to make users lose.”

Last month, authorities announced at a news conference that they had so far identified 118 alleged victims who collectively lost more than 72 billion Indonesian rupiah ($5 million).

Police also seized luxury cars and belongings of Salmanan and Kesuma worth about $8.25 million.

“In reality, Doni Salmanan was not trading on the website and was just an affiliate company to take advantage of the members,” Brigadier General Suheri said at the press conference.

‘The greater the profit, the greater the risk’

According to researchers from Indonesia’s Cybercrime Unit, Kesuma and Salmanan received about 80 percent of the money users lost when they signed up for trading accounts using the affiliate codes provided by the two men.

Before the arrests, Kesuma attracted more than 200,000 members to a Telegram group that brought in new Binomo users, while Salmanan’s Quotex Telegram group had more than 25,000 users.

“Police were negligent and slow in dealing with this, even though Binomo and other rogue applications have long gone wrong,” Sitepu said, adding that many people were particularly vulnerable during the pandemic because they were “out of work.” or not make as much money as they usually would.”

“They should have been shut down at a much earlier stage.”

Zamroni Salim, head of the macroeconomics and finance research center at the National Research and Innovation Agency (BRIN), said the case shows Indonesians need to be more careful when investing.

“The case against Binomo and Indra Kenz arose in response to complaints from the public who felt they had lost money because of this type of investment. But this didn’t have to happen,” Salim told Al Jazeera.

“There is a saying in trading: only invest the amount of money you can afford to lose. This is one of the fundamentals of investing, that in the name of investing there must be risks. The greater the potential gain, the greater the risk, but Indonesian people are easily lulled to sleep by the temptation of greatness, especially when conveyed or advertised by celebrities and public figures.

Fauri, the CSIS economist, said binary trading sites are particularly attractive because of their association with influencers who lead seemingly lavish lifestyles.

“Public figures advertise those products, and it attracts people and combines with a lack of digital literacy,” he said. “It has to change. They may only advertise if the product is licensed or licensed by the Financial Services Authority of Indonesia (OJK) or Commodity Futures Trading Regulatory Agency (Bappebti).”

While Salmanan and Kesuma are out of jail every 20 years, authorities seem powerless to do much about the apps themselves, which are not physically present in Indonesia.

While the police investigation is still ongoing, it is unclear whether the platforms were involved in the alleged fraud of Salmanan and Kesuma.

Binomo is registered with Dolphin Corp, a company based in Saint Vincent and the Grenadines in the Caribbean, while Quotex is registered in the Seychelles. The ownership of the companies remains unclear.

Police say Salmanan and Kesuma have declined to confirm whether they work for anyone else, although they suspect more people are involved.

In 2021, Binomo was the fourth most downloaded financial app in Indonesia, although it has since been blocked and is no longer available on the Google Play Store or the Apple App Store.

Quotex is also blocked in Indonesia along with hundreds of similar binary trading sites. Binomo and Quotex did not respond to requests for comment.

“As long as the company is still in place, Binomo can continue its activities,” Sitepu said. “These kinds of apps are very hard to stop without cooperation between countries.”

“If we think of Binomo as a snake, he must be beheaded. What we have so far is only the tail.”

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