Classification of Crypto Assets as Securities: A Comparative Study of the Otoritas Jasa Keuangan Approach and the Howey Test in the United States
The rapid development of digital assets has prompted regulators around the world to reconsider how financial law should apply to cryptocurrencies. One of the most important legal questions is whether certain crypto assets should be classified as securities. The classification is crucial because it determines the applicable regulatory framework, disclosure obligations, investor protection standards, and supervisory authority.
In Indonesia, regulatory oversight of crypto assets has evolved through several institutional transitions, particularly following the enactment of the Financial Sector Development and Strengthening Law. Meanwhile, in the United States, courts and regulators frequently rely on the Howey Test, a judicial doctrine used to determine whether a financial instrument constitutes a security.
This article provides a comparative analysis of Indonesia’s regulatory approach—particularly the role of the Otoritas Jasa Keuangan (OJK)—and the application of the Howey Test in the United States. The comparison highlights both conceptual similarities and structural differences in the classification of crypto assets as securities.
Regulatory Framework for Crypto Assets in Indonesia
Indonesia initially classified crypto assets primarily as commodities rather than securities. Under the regulatory framework supervised by the Badan Pengawas Perdagangan Berjangka Komoditi (Bappebti), crypto assets were recognized as tradable commodities within the futures trading ecosystem. This classification was formally reflected in various regulations governing digital asset exchanges and derivative markets.
However, the regulatory landscape has gradually shifted following the enactment of Law No. 4 of 2023 on Financial Sector Development and Strengthening, which introduced institutional reforms in Indonesia’s financial sector. One of the law’s key implications is the gradual transfer of supervisory authority over crypto assets from Bappebti to OJK.
This transition signals a broader policy direction: digital assets are increasingly viewed not merely as commodities but as financial instruments that may fall within the scope of capital market regulation. While Indonesian law has not yet formally classified specific crypto assets as securities, the evolving regulatory framework suggests that certain token structures—particularly those resembling investment contracts—could eventually be treated similarly to securities.
In this context, OJK is expected to develop regulatory criteria for distinguishing between utility tokens, payment tokens, and tokens that function as investment instruments. Such differentiation is essential to determine whether particular crypto assets should fall under capital market supervision.
The Howey Test and Securities Classification in the United States
In contrast to Indonesia’s evolving regulatory framework, the United States has relied on a long-standing judicial doctrine known as the Howey Test. The test originated from the landmark case SEC v. W. J. Howey Co. (1946), decided by the Supreme Court of the United States.
The Howey Test determines whether a transaction qualifies as an “investment contract,” which is one category of securities under U.S. federal law. According to the test, a financial arrangement is considered a security if it involves:
An investment of money;
In a common enterprise;
With a reasonable expectation of profits;
Derived from the efforts of others.
This four-element test has been widely applied by regulators such as the U.S. Securities and Exchange Commission (SEC) when assessing whether crypto tokens constitute securities.
In numerous enforcement actions, the SEC has argued that many token offerings meet these criteria, particularly when investors purchase tokens expecting profits generated by the development team or platform operators. As a result, several initial coin offerings (ICOs) have been treated as unregistered securities offerings under U.S. law.
The Howey Test therefore serves as a flexible legal framework capable of adapting to new financial innovations, including blockchain-based assets.
Comparative Analysis: Indonesia vs. the United States
Although Indonesia and the United States operate within different legal traditions, both jurisdictions face similar challenges in classifying crypto assets.
First, the United States relies primarily on judicial interpretation, while Indonesia relies more heavily on administrative regulation. In the U.S., courts interpret the Howey Test and apply it to new financial instruments. In Indonesia, regulatory bodies such as OJK are expected to formulate technical rules that determine how digital assets should be categorized.
Second, the American approach focuses on the economic substance of a transaction, whereas Indonesia’s regulatory framework historically focused on the market infrastructure in which crypto assets are traded. Under Bappebti’s supervision, the emphasis was placed on regulating crypto exchanges as commodity marketplaces rather than evaluating the legal nature of each token.
Third, the Howey Test offers a case-by-case analytical method, allowing regulators to assess each crypto project individually. Indonesia, by contrast, has traditionally used a positive listing system, where specific crypto assets must be approved before being traded on registered exchanges.
Despite these differences, both systems ultimately aim to address the same policy concerns: investor protection, market integrity, and financial stability. As crypto markets grow more complex, regulators in both jurisdictions may increasingly focus on the functional characteristics of tokens rather than their technological labels.
Implications for Regulatory Development in Indonesia
The ongoing transition of crypto asset supervision to OJK presents an opportunity for Indonesia to develop a more nuanced classification framework. One possible approach is adopting a principle similar to the Howey Test, focusing on whether a crypto asset functions as an investment contract.
Such an approach could help regulators identify tokens that promise profit derived from managerial or entrepreneurial efforts. If these characteristics are present, the token could potentially fall within the scope of capital market law.
At the same time, Indonesia must consider the practical realities of its domestic crypto ecosystem. Many crypto assets traded in Indonesia originate from global projects, making enforcement and regulatory coordination more complex.
Therefore, any classification framework must balance regulatory clarity with technological neutrality. Overly rigid rules may hinder innovation, while insufficient oversight could expose investors to significant risks.
Conclusion
The classification of crypto assets as securities remains one of the most significant legal challenges in modern financial regulation. The United States relies on the Howey Test as a flexible judicial standard for determining whether digital assets qualify as investment contracts. Indonesia, on the other hand, is currently undergoing a regulatory transition that may expand the role of capital market supervision in the crypto sector.
While the two jurisdictions employ different legal mechanisms, both seek to address the same fundamental issue: identifying when a digital token functions primarily as an investment instrument rather than a mere technological utility.
As Indonesia’s regulatory framework continues to evolve under the supervision of OJK, comparative insights from the Howey Test may provide valuable guidance. By focusing on the economic realities of crypto transactions, regulators can develop a more coherent and adaptive approach to classifying digital assets within the broader financial legal system.
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