Medan, Indonesia – Indonesian influencers Indra Kesuma and Doni Salmanan led the kind of lifestyles that most people could only imagine.
On his deleted Instagram, the 25-year-old Kesuma, known as Indra Kenz, frequently posted photos of him posing in front of luxury vehicles and wearing fashionable watches and clothing.
On the television show Crazy Rich Indonesia in January, Kesuma, from Medan in North Sumatra, regaled the viewers with tales of purchasing T-shirts worth $30,000, while the Bandung-based Salmanan 23 boasted giving $100,000 to an online player just because he had no other things to do.
Kesuma and Salman were able to attribute their massive fortune to their successful trading on Binomo and Quotes, respectively, which are binary option trading applications that allow traders to place bets on a price’s rise or fall within a time-bound period to have an opportunity to win an amount that is fixed.
While Kesuma, as well as Salman, claimed that they made fortunes through the apps, scores of others claim to have lost massive sums of money in the course of what Indonesian authorities call an elaborate fraud.
In February, one month after talking about his self-made fortune on broadcasting, Kesuma traded his designer T-shirts for a bright orange jumpsuit after being taken into custody at the hands of the Indonesian police. Police detained Salmanan later that month.
Both are now facing charges of fraud, internet gambling, money laundering, and violating the Indonesian Electronic Information and Transactions Law (ITE) in spreading what they believe to be fake information. In press conferences held last week, Kesuma and Salman expressed their regrets for what they did and said they hoped that their arrests would be a reminder to others who might be interested in investing.
Kesuma’s lawyer didn’t reply to an inquiry for comments, and Al Jazeera’s attempts to contact Salmanan’s legal representative did not succeed.
“We need to look at more than just Indra Kenz and the Binomo case,” Adinova Faure, an economist at the Center for Strategic and International Studies (CSIS), told Al Jazeera.
“The practice of illegal online trading platforms in Indonesia keeps rising, even though the government keeps trying to block them.”
According to the police reports submitted by the accused victims, the issues with the apps started when users signed up with affiliate codes supplied through Kesuma and Salman.
“The ‘trading’ mechanism that Binomo used was clearly unreasonable from the start,” Vinsensius Sitepu, a financial journalist and private investor, said to Al Jazeera.
“The data varied among users and the time frame to decide whether prices would rise or down was extremely tiny. Some user accounts were suddenly closed, funds were not able to be withdrawn and the list goes on,” Sitepu said.
“The Binomo system seemed designed to make users keep losing.”
At a press conference held last week, officials announced they’d identified 118 suspected victims, who have collectively lost over 72 billion Indonesia rupiah ($5m).
Police have also seized high-end vehicles and other property in Salman and Kesuma worth $8.25m.
“In reality, Doni Salmanan did not trade on the website and was only an affiliate to benefit from members,” Brigadier General Suheri told reporters during the press conference.
The greater the profit, the higher the risk.’
According to the Indonesian police’s cybercrime department, Kesuma and Salman received around 80 percent of the funds that the users lost when they registered for trading accounts using affiliate codes supplied to them by two individuals.
Before the arrests, Kesuma attracted over 200,000 members to the Telegram group to bring new Binomo users. The Quotes Telegram group operated by Salman was home to more than 25,000 members.
“The police were negligent and slow in how they handled this, even though things had been wrong for a long time with Binomo and other rogue applications,” Sitepu stated, noting that many were vulnerable to the virus because people are “out of work or not making as much money as they usually would.”
“They should have been shut down at a much earlier stage.”
Zamroni Salim, head of the Research Center for Macroeconomics and Finance at the National Research and Innovation Agency (BRIN) Zamroni Salim, the head of the Research Center for Macroeconomics and Finance incident demonstrated the necessity for Indonesians to exercise greater caution when they invest.
“The matter against Binomo as well as Indra Kenz arose because of complaints from people who believed that they lost money as a result of this type of investment. However, this shouldn’t have to occur,” Salim told Al Jazeera.
“There is a phrase in trading that states: Only invest as much money you can afford to lose. That is just one of the most fundamental principles of investing, which is that in the name of investing, there has to be the possibility of risk. The bigger the potential for profits, the more risk, however Indonesian individuals are easily lured by the illusion of awe-inspiring beauty, particularly when it is advertised or promoted by public figures and celebrities.”
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The CSIS economist Faure stated that the binary trading websites had enjoyed particular appeal because of their connection with influential people living lavish lives.
“Public figures advertise those products, and it attracts people and combines with a lack of digital literacy,” he added. “It must change. Only advertise products that have an approval or license issued by the Financial Services Authority of Indonesia (OJK) or Commodity Futures Trading Regulatory Agency (Bappebti).”
As Salman and Kesuma could face between 20 and 20 years beyond their bars, authorities are incapable of doing anything about the apps that don’t have a physical presence in Indonesia.
The police investigation is in progress. It’s unclear which platforms are involved in Salman and Kesuma’s fraud allegations.
Binomo is registered with Dolphin Corp, a company located in Saint Vincent and the Grenadines in the Caribbean, and Quotes have been reported to Seychelles. The ownership of the two companies is not clear.
Police say that Salman and Kesuma have not confirmed whether they work for any other company, but they believe more people could be involved.
The year 2021 was when Binomo had been the third most popular finance app downloaded in Indonesia. However, Binomo has been removed and is not available on the Google Play Store or the Apple App Store.
Quotes are also blocked in Indonesia and hundreds of other similar sites for binary trading. Binomo and Quotes have not responded to inquiries for clarification.
“As long as the company is still standing somewhere, Binomo will still be able to continue its activities,” Sitepu declared. “Apps like these are very hard to stop without cooperation between countries.”
