Medan, Indonesia – Indonesian influencers Indra Kesuma and Doni Salmanan have lived a life most people can only dream of.
On his now-deleted Instagram, 25-year-old Kesuma, aka Indra Kenz, regularly posts pictures of himself posing with luxury cars, watches and designer sportswear.
During an appearance on the TV show Crazy Rich Indonesia, in January, Kesuma, from Medan in North Sumatra, captivated the audience with his story of buying a $30,000 T-shirt, while Salmanan, 23, from Bandung, brags about giving away $100,000 online simply because he has nothing better to do.
Kesuma and Salmanan attribute their wealth to successful trading on Binomo and Quotex, respectively, binary options trading apps that allow users to bet on the rise or fall of stocks over a period of time. Strict limits for a chance to win a fixed amount.
But while Kesuma and Salmanan claim to have made their fortunes on apps, dozens of others say they have lost large sums of money in what Indonesian authorities are calling a complex financial scam. complex.
In February, just a month after discussing his wealth on national television, Kesuma traded his designer t-shirt for an orange jumpsuit when he was arrested by Indonesian police Hold. Police arrested Salmanan the following month.
Both men now face charges of fraud, online gambling, money laundering and violating Indonesia’s Electronic Information and Transactions Act (ITE) by spreading so-called fake news. At their press conference in March, Kesuma and Salmanan apologized for their actions, expressing hope their arrest would serve as a warning to other future investors.
Kesuma’s attorney did not respond to a request for comment, and Al Jazeera’s attempts to reach Salmanan’s legal representative were unsuccessful.
Adinova Fauri, an economist at the Center for Strategic and International Studies (CSIS), told Al Jazeera: “We need to look at more than just Indra Kenz and the Binomo case.
“The activity of illegal online trading platforms in Indonesia continues to increase, despite the government’s efforts to stop them.”
According to a police report filed by the alleged victims, the problems with the app began shortly after a user signed up using the affiliate code provided by Kesuma and Salmanan.
“The trading mechanism that Binomo uses is clearly not sensible from the start,” Vinsensius Sitepu, a financial journalist and private investor, told Al Jazeera.
“The data varies between users, the time period to choose whether the stock price will go up or down is very short. There are user accounts that are suddenly closed, unable to withdraw funds, etc,” said Sitepu.
“The Binomo system seems to be designed to keep users losing.”
At a press conference last month, authorities announced they had identified 118 victims who are believed to have suffered a total of more than 72 billion Indonesian rupiah ($5 million).
Police also seized luxury cars and assets of Salmanan and Kesuma worth about $8.25 million.
“Actually, Doni Salmanan does not transact on the website and is only an affiliate to profit from members,” Brigadier General Suheri said at the press conference.
‘The bigger the profit, the bigger the risk’
According to investigators from the Indonesian cybercrime unit, Kesuma and Salmanan received around 80% of the funds lost by users when they signed up for a trading account using the affiliate code provided by the two men.
Before his arrest, Kesuma had attracted more than 200,000 members to a Telegram group used to attract new Binomo users, while the Quotex Telegram group run by Salmanan had more than 25,000 users.
“The police were sloppy and slow in the way they handled this, even though things went wrong for a long time with Binomo and other fake apps,” Sitepu said, adding that many people are particularly vulnerable during the pandemic because they have “got away from working or not making as much money as they usually do”.
“They should have closed at a much earlier stage.”
Zamroni Salim, head of the Center for Macroeconomic and Financial Research at the National Agency for Research and Innovation (BRIN), said the case showed Indonesians need to be more careful when investing.
“The lawsuit against Binomo and Indra Kenz arose because of complaints from the public, who felt that they had lost money because of this type of investment. But this doesn’t have to happen,” Salim told Al Jazeera.
“There is a saying in trading: Invest only what you can afford to lose. This is one of the fundamental principles of investing, that in the name of investing there must be risk. The greater the potential return, the greater the risk, but Indonesians tend to be lulled by the lure of fanfare, especially if it is communicated or advertised by celebrities and public figures. of the public”.
Fauri, an economist at CSIS, says binary options trading sites have gained particular appeal due to their association with influencers who lead a seemingly lavish lifestyle.
“Public figures advertise those products, and it appeals to people and combines with a lack of digital literacy,” he said. “It has to change. They should only advertise if the product has a license or license from the Indonesian Financial Services Authority (OJK) or the Commodity Futures Trading Authority (Bappebti). ”
While Salmanan and Kesuma face 20-year deadlines, each appears powerless to handle applications that are not present in Indonesia.
While the police investigation is still ongoing, it remains unclear whether the platforms are involved in the alleged scam of Salmanan and Kesuma.
Binomo is registered with Dolphin Corp, a company in Saint Vincent and the Grenadines in the Caribbean, while Quotex is registered in the Seychelles. Ownership of the companies remains unclear.
Police said Salmanan and Kesuma declined to confirm whether they were working for anyone else, although they suspect multiple people were 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 has also been blocked in Indonesia along with hundreds of similar binary trading sites. Binomo and Quotex did not respond to requests for comment.
Sitepu said: “As long as the company is still standing somewhere, Binomo can continue its activities. “Apps like this are very difficult to stop without cooperation between countries.”
“If we consider Binomo a snake, it needs to be beheaded. What we have so far is just the tail ”.