Indonesia’s digital financial ecosystem is expanding rapidly, but regulatory scrutiny has struggled to keep pace with the growing influence of social media personalities who offer investment commentary to millions of followers.
This governance loophole was starkly exposed in February 2026, when the Financial Services Authority (FSA) imposed a historic fine of 5.35 billion rupiah on a financial influencer identified as BVN for manipulating share prices and spreading misleading information through social media platforms.
Investigators found the influencer used multiple securities accounts to pump and dump shares of at least three listed companies, posting promotional recommendations while executing contrarian trades and profiting from followers’ reactions.
The behavior was found to violate articles 90, 91 and 92 of law no. 4 of 2023 for the development and strengthening of the financial sector, which prohibit market manipulation and fraudulent practices in the capital market. This episode highlights how the unchecked influence of social media can distort markets and undermine investor protection.
The problem extends beyond isolated misconduct. Across social media platforms, influencers routinely promote cryptocurrency tokens, speculative stocks, and alternative investment schemes, often framing their content as financial education, while monetizing engagement through advertising, affiliate links, or undisclosed commercial deals.
Retail investors, many of them first-time participants in capital markets, may have difficulty distinguishing between independent analysis and paid persuasion. In volatile markets, such stories can reinforce herd behavior and exacerbate losses.
Without a clear regulatory classification, enforcement agencies face difficulty in determining when online comments cross the threshold into regulated advisory activity.
Indonesia’s legal framework for financial advisory services remains anchored in Law no. 8 of 1995 on capital markets and implementing regulations issued by OJK. Licensed investment advisers must meet competency standards, ethical obligations and appropriate requirements.
These safeguards exist because financial advice directly affects capital allocation and public confidence. However, the framework was created for conventional advisory firms, not a decentralized digital ecosystem where influence is algorithm-driven and monetized through visibility.
The substantive legal issue is substantive and not formal. If a person makes investment recommendations that influence market behavior and receives economic benefit directly or indirectly, should that activity be included in the scope of regulated advisory services?
If regulatory responsibility depends only on formal titles, digital actors may operate in a gray area while licensed professionals bear disproportionate compliance burdens. Such asymmetry undermines fairness and weakens investor protection. OJK has the authority to clarify this boundary through interpretive guidance or regulatory refinement.
Law often lags behind technological innovation and social change, resulting in delayed and fragmented regulation. Proactive measures – such as predictive frameworks and benchmarking – are essential to govern emerging innovations, particularly in the financial sector.
OJK has adopted a regulatory sandbox approach, allowing new business models to be tested under controlled conditions before implementing general regulations, helping authorities assess potential risks before full-scale implementation.
According to POJK 3 of 2024, which replaces POJK 13 of 2018, digital financial business models, processes and products may undergo limited testing before obtaining full licensing. The challenge lies in finding the right balance between oversight and innovation.
The sandbox framework should be extended beyond business models to include influencers and other entities functionally related to financial innovation. Such an approach is critical to prevent individuals from exploiting regulatory loopholes for personal gain at the expense of retail investors.
While criminal provisions exist to address violations, preventive and administrative regulations are equally vital, ensuring that punitive measures remain a last resort rather than the primary regulatory response.
Comparative jurisdictions provide useful guidance. In the UK, the Financial Conduct Authority requires authorization for regulated investment advice and has warned that unauthorized financial promotion on social media can constitute a criminal offence.
In the United States, the Securities and Exchange Commission and the Financial Industry Regulatory Authority enforce the registration requirements and fiduciary obligations under the Investment Advisers Act. Enforcement increasingly targets unregistered crypto promoters and influencers who fail to disclose paid endorsements. The principle is consistent: the substance of the influence determines the responsibility.
In China, financial advisers are overseen by the National Financial Regulatory Administration, established in 2023, while the China Securities Regulatory Commission continues to oversee the securities and futures markets.
The regulations require firms and individuals to hold China Securities Regulatory Commission licenses, a framework now extended to Internet-based financial services. The authorities have introduced rules to address the risks associated with online platforms, covering cross-border service provision, online information management and activities such as customer profiling, asset allocation and trade execution.
Indonesia stands at a regulatory crossroads. Digital participation in the capital market is expanding rapidly, especially among younger demographics. Encouraging financial inclusion is commendable.
However, involvement without adequate safeguards can generate instability and erode trust. The objective is not to criminalize online discussion, but to ensure that those who materially shape investment behavior meet proportionate standards of competence, transparency and accountability.
Therefore, a credible reform agenda must begin with definitional clarity. OJK should articulate when digital financial commentary becomes a regulated advisory activity. Disclosure obligations should apply to the content of monetized investments.
Coordination between financial regulators and digital platforms needs to be institutionalized to address cross-sectoral risk. After all, trust is the foundation of the capital market – and trust cannot thrive in regulatory uncertainty.
Ahmad Novindri Aji Sukma is a regulatory compliance lawyer based in London and a PhD researcher at the University of Cambridge. Randy Taufik is a legal advisor and Oxford University alumnus specializing in corporate and technology law.
