Problem of Investment Literacy

KOMPAS/ADITYA DIVERANTA

The remaining balance of the WinCash Coin crypto in Gatuk Indarto's digital wallet in Banten, Wednesday (1/12/2021). The balance has not been able to be withdrawn since mid-2020 until now because the digital wallet has been deactivated.

Case after case of investment fraud keeps happening over and over again. The public are becoming victims while the perpetrators are left to roam around freely.

The investigations of Kompas daily discovered a number of Ponzi schemes, also called “money game”, many of which involved investing in crypto assets. Crypto is used as a way out when the money game becomes stagnant and is no longer profitable.

When a Ponzi scheme is no longer able to distribute cuan (profits) to participants, the organizer (“boss”) of the money game creates fake crypto tokens. These tokens are then distributed to the participants as their share of the profit (Kompas, 6/1/2022).

Also read:

>Understanding the Risks of Crypto Investment

> Investor Protection Should be a Priority

> Muhammad Lutfi: We are Improving Crypto Asset and E-commerce Regulations

This daily has found numerous cases of investment fraud over the past few decades, ranging from investments in agriculture, plantations, properties and vehicles, to the schemes today that use the guise of digital assets. Victims are defrauded and incur losses of not just billions of rupiah, but losses that reach trillions of rupiah.

Such schemes generally start by luring participants with talk of investments with spectacular returns. People who don't understand investment are immediately drawn by these scams to place their funds into various investment products. They then come to regret their involvement when all the promises turn out to be empty and their money has simply disappeared.

KOMPAS/ADITYA DIVERANTA

Display of Mark AI's deactivated crypto asset robot trading site as of October 17, 2021.

The main problem is poor investment literacy. People only dream about making big returns without knowing the risks. This is where disaster begins. Those knowledgeable about investing always look at the risks alongside the promised returns. An investment that promises unreasonable returns automatically raises their alert for the investment products on offer.

Scammers will continue to operate. The same methods that are being used over and over again indicate that the actors are operating in the same circle. They are familiar with these methods because they are of the same aji mumpung (opportunistic) type. We certainly hope the police will take action against these swindlers and deter them. They are still roaming around, escaping the law.

Victims of these fraudulent activities range from the very top to the very bottom of society, so investment education must reach all levels.

Regardless of whether we rely on various legal efforts, authorities need to continue to promote investment literacy, from the rich to the poorest people. Victims of these fraudulent activities range from the very top to the very bottom of society, so investment education must reach all levels.

Also read:

> Bitcoin Still Causing Confusion

> Questioning Bitcoin

Investment literacy is needed more and more, because the investment products being offered of late are more tempting for appearing modern, such as crypto assets and foreign exchange. The devices used, like trading bots, even give the impression that they are more sophisticated.

People are confused in their understanding of these investment products. They also lack understanding about the risks involved. As a result, they recklessly decide to invest in products that are actually part of fraudulent schemes. We still need to improve investment literacy.

(This article was translated by Hyginus Hardoyo).