Legal Liability of Digital Wallet Providers in Cases of Crypto Asset Loss: An Empirical Legal Approach

Abstract

The rapid development of cryptocurrency in Indonesia presents significant economic opportunities while also introducing substantial security risks, particularly the loss of assets due to digital wallet hacks. This study aims to analyze legal protection for cryptocurrency owners using a normative juridical and empirical approach, examining national regulatory frameworks, the liability of digital wallet providers, cybersecurity standards, and dispute resolution mechanisms. The research methodology includes literature review, analysis of legislation, examination of service provider contracts, and interviews with hack victims. The findings indicate that Indonesian regulations still categorize cryptocurrencies as commodities, resulting in limited consumer protection, unclear legal responsibilities for wallet providers, inconsistent cybersecurity standards, and ineffective dispute resolution mechanisms. Many platforms implement contractual clauses that transfer nearly all risk to users, while most hacks occur due to system vulnerabilities rather than user negligence. This study emphasizes the need for comprehensive regulations that establish minimum security standards, independent audits, compensation mechanisms, clear dispute resolution procedures, and digital literacy education for the public. The findings are expected to provide a foundation for strengthening legal frameworks and consumer protection policies for cryptocurrency in Indonesia and contribute to the theoretical development of legal liability and digital consumer protection in the blockchain era.