Reformulation of anti-money laundering policy on crypto assets through the integrated criminal justice system with global regulatory standards

Abstract

Background: The emergence of crypto assets as a digital asset has transformed the global financial system, offered innovation but also generated new risks, particularly money laundering (ML). In Indonesia, crypto assets are not recognized as legal tender but has shifted from being classified as a commodity under Bappebti to a digital financial asset under the supervision of OJK through the enactment of the P2SK Law, PP No.49/2024, and POJK No.27/2024. However, the current Anti Money Laundering (AML) framework, especially UU PPTPPU, has not fully integrated Financial Action Task Force (FAFT) recommendations, especially regarding Virtual Assets (VA) and Virtual Asset Service Provider (VASP).  Method: This study employs a doctrinal legal research method utilizing statute, comparative, and conceptual approaches to analyze the reformulation of the Indonesian Anti-Money Laundering Law (UU PPTPPU) in alignment with Lawrence Friedman’s legal system theory. The analysis follows a deductive logic by synthesizing primary and secondary legal materials to develop a policy framework that integrates an Integrated Criminal Justice System (ICJS) with machine learning technology for detecting crypto-based money laundering. Finding: Findings reveal that the absence of VA and VASP in UU PPTPPU creates legal gaps that may be exploited by criminals. Reformulation is urgently needed by incorporating VA and VASP definitions, strengthening reporting obligations, and integrating technology such as machine learning in the PPATK’s goAML platform. Conclusion: An Integrated Criminal Justice System (ICJS) model is required to harmonize regulation, institutional coordination, and law enforcement culture. Such a framework is expected to create an adaptive AML system against cryptocurrency-based ML while maintaining financial integrity and supporting sustainable economic development. Novelty/Originality of this article: This research introduces a "techno-legal" transition model for Indonesia’s AML regime, bridging the legislative gap between the new P2SK Law and the outdated UU PPTPPU.