Overcoming Regulatory Hurdles in the Indonesian Crowdfunding Landscape

Abstract

With the exponential rise in crowdfunding, several pertinent issues have come to the fore. These include unauthorized access to personal data, exorbitant interest rates for funding recipients, and investor fund security concerns. Other issues, such as aggressive debt collection practices and misuse of donated funds, also warrant attention. The underdeveloped state of crowdfunding regulations in Indonesia, which offers insufficient legal certainty and protection, is often blamed for these issues. Thus, a thorough examination of the legal and regulatory framework governing crowdfunding in Indonesia is crucial. This study scrutinizes the legal norms, identifies, and harmonizes the diverse regulations applicable to crowdfunding in Indonesia. The findings underscore the necessity for enhancements in the laws and regulations pertinent to crowdfunding. Key areas of focus should include establishing a legal status for crowdfunding platforms, setting fair interest rates, fortifying investor fund security mechanisms, penalizing illegal crowdfunding activities, and intensifying oversight of fund usage in donation-based crowdfunding schemes. Equally crucial is the imposition of penalties for regulatory breaches in crowdfunding, reflecting a genuine commitment towards ensuring justice and legal certainty in all crowdfunding transactions.

Revitalizing Criminal Liability Models in Banking Regulations: Towards Achieving Justice

“…That means that when a rule is promulgated, it must ensure that all parties get equal rights to be recognized, protected, and treated in the same way under the law. In addition, fair regulation must also be able to assure that any individual or entity that violates the rules will get sanctions for the wrongdoing committed, without discrimination (Noor et al, 2023).…”

Regulatory Evolution: Addressing Challenges and Enhancing Legal Certainty in Indonesian Donation-Based Crowdfunding Services

“…The existence of DBC in the country not only reflects the spirit of gotong-royong but also marks the high level of social care in society, in line with the values of Pancasila, which is the foundation of the nation's philosophy. The existence of this internet-based crowdfunding platform shows that the development of information technology has played a key role in giving birth to various financial technology start-ups, including facilitating the practice of DBC in Indonesia (Noor et al, 2023). In the digital era, it is now easier for people to make transactions online, including fundraising.…”

“…Although the development of donation-based crowdfunding (DBC) promises positive potential, DBC is also faced with several challenges that need to be overcome so that this fundraising activity can make an optimal contribution to the welfare of society in general. These challenges faced by DBC in Indonesia should be taken seriously to form the basis of an in-depth understanding of the dynamics of the development of fundraising practices in Indonesia (Noor et al, 2023). These challenges in donation-based crowdfunding in Indonesia indicate the existence of complex dynamics involving social, economic, legal, and technological factors.…”