Crypto in Indonesia: celebrities using their fame to sell NFTs

In late January, Indonesian celebrity couple Anang and Ashanty made headlines when they launched ASIX, their own NFT token. Prior to launch, they promoted its presale on their 460k subscriber YouTube channel, in a video with the bombastic title “ASIX presale token tonight, get ready to be a billionaire!” and explained how the token was sold out in less than a minute during the private sale.

A few days later, Anang aware in their social networks how other celebrities have bought more than 100 million IDR and up to 1 billion IDR in tokens.

But it didn’t take long for Anang, the singer, producer and also a member of the House of Representatives, to get some bad news. One week after the launch of the NFT token. The Indonesian Commodity Futures Trading Regulatory Agency (Bappebti) dropped a cheep saying that ASIX is prohibited from doing business, as it is not legally licensed.

A few hours later, the value of the NFT token halved and its investors began to protest. In his ASIX Token ID Telegram group, people asked why their money suddenly reduced from IDR 10 million to IDR 5 million, as if they had little or no idea about the risks.

“Hello Mr. Anang, I bought it at IDR 25 million but now it is priced at IDR 12 million. Please give me my money back as we will soon be approaching the month of fasting.” wrote a member of the Telegram group.

Despite the turmoil, the celebrity token trend continues. Subsequently, Wirda Mansur (daughter of the famous Indonesian cleric Yusuf Mansur) launched I-CURRENCY. This stirred things up even more, as Yusuf used his position as a well-known religious figure to promote Wirda’s latest business venture. It didn’t take long for other names like dangdut singer Lesli Kejora and former dangdut singer Angel Lelga to also create your own tokens.

Indonesians are familiar with famous names who use their stardom to sell products. A similar trend occurred several years ago, when local celebrities (with no prior experience as bakers) began selling cakes and desserts. They called their cakes ‘local souvenirs’ when they set up outlets in various cities in Indonesia, with names like Medan MarPar, Semarang Wife Cake and Surabaya Snow Cake. During the height of their fame, some stores like Syahrini’s Bogor Princess Cake became trending topics on social media for creating lines of curious shoppers outside their stores. However, it did not take long for the culinary trend to cease; most celebrity endorsed dessert shops are now closed for business

These fame-backed business ventures seemed very profitable to celebrities for a short period of time, and there is no doubt that the trend will continue with different products being sold to a devoted audience.

But the celebrity NFT token trend in Indonesia sparked a different kind of controversy, especially given the lack of digital literacy among its target markets. Anang and Ashanty, for example, are especially popular with older women in Indonesia, who need more information on digital security issues, as highlighted in the digital literacy rate.

Investment practitioner Desmond Wira explained, via Kompas.comthat people should not be easily swayed by big celebrity names when it comes to investing in NFTs.

“If we buy these celebrities’ coins and then lose money, will these celebrities replace our money? They won’t, will they? That’s why we need to think about this, don’t buy coins from these celebrities just because we’re their fans,” Desmond said.

Indonesian financial content provider Big Alpha also raised concerns:

“Crypto assets will not produce cash flow (unlike dividends in the stock markets, coupons on bonds, or rents in the real estate market). The only way to make money is by selling it to other parties at a higher price. Just a kind reminder,” they tweeted.

The growing popularity of NFTs and cryptocurrencies in Indonesia has also highlighted the importance of digital literacy. Indonesia’s latest digital literacy rate showed a slight increase, from 3.49 to 3.46. As the Ministry of Communication and Information reported, digital skills and culture are improving, but digital ethics and safety are getting worse. The lowest score was found in the aspect of digital security. Further analysis of the index showed that digital literacy still needs improvement for the following groups: women, low-income people, people with little education, and older people.

This situation also shows the importance of stricter regulations. In Indonesia, the regulation and supervision of crypto assets is carried out by the Commodity Futures Trading Regulatory Agency, or Bappebti. The agency also issues a white list of tokens that can be traded in Indonesia and reviews all new coins entering the local market. However, digital assets can be openly promoted by trading platforms, celebrities, and even, as shown in the case of ASIX, members of the House of Representatives.

Stricter regulations can be found in other countries, such as Singapore. Earlier this year, the Monetary Authority of Singapore (MAS) issued guidelines prohibit digital payment token service providers from promoting and advertising in public areas and media. They may only advertise on their own corporate website, mobile apps, or official social media accounts.

Considering the low digital security ratings in Indonesia and the growing number of local celebrities launching their own NFT tokens, it is crucial that action is taken quickly. Digital literacy needs to be improved, and more stringent government regulations needed, before devoted fans lose more money because they know more about their idols than the risks of buying unlicensed NFT tokens.

Image credit: Jeremy Bezanger