When a developer misses deadlines, stops responding, or fails to return invested funds, many people immediately consider going to court or the police. In practice, the first and most important step is a legal analysis of the situation. This helps determine whether the issue is simply a breach of contract or whether there are already signs of fraud.
Client case
A group of foreign investors put several million dollars into the construction of a complex in Bali. A significant proportion of the payments were made in cryptocurrency.
The completion deadline passed long ago, construction has still not begun, and there has been no activity at the site for about two years.
The developer attributes the delay to waiting for a building permit (PBG), but has not returned the money even to investors who have already signed contract termination agreements. The company has also failed to provide financial statements or evidence of its expenses.
Breach of contract or fraud?
A delayed construction project does not in itself mean that a crime has been committed. The key question is what exactly has happened from a legal perspective.
If the developer is genuinely processing the required documents, has rights to the land, and can prove that the funds are being used to deliver the project, the matter is most likely a civil dispute (wanprestasi). In this case, investors can seek a refund and compensation for losses through the courts.
However, if it turns out that the required permits do not exist, no real preparations for construction were made, and the money was raised on the basis of promises that were known to be impossible to fulfil, there may be grounds to consider possible fraud (penipuan) or misappropriation of funds (penggelapan).
This is why the amount of the loss alone does not determine whether a case is civil or criminal. The documents and evidence are decisive.
If payments were made in cryptocurrency
Paying in cryptocurrency does not prevent an investor from seeking a refund, but it makes proving the case more difficult.
It is important to retain complete information for every transaction: the date, amount, value equivalent at the time of transfer, wallet addresses, transaction hash, and evidence that the developer accepted the transfer specifically as payment under the contract.
What to do first
Once the documents have been reviewed, the usual strategy is as follows:
- gather all supporting evidence and send the developer a formal demand letter (somasi);
- assess the response and verify whether the project is actually going ahead;
- based on the evidence obtained, pursue a civil claim, report the matter to law enforcement, or combine both approaches.
A properly prepared pre-litigation demand letter often becomes a key piece of evidence in any subsequent dispute.
If you are in a similar situation
Do not transfer any additional money until the legal review is complete. Keep all contracts, correspondence, advertising materials, and proof of payment. If there are several investors, consolidate the documents and create a shared timeline of events—this will significantly strengthen your position.
Most importantly, do not rush to file a police report. If the dispute turns out to be purely contractual, valuable time may be lost and the authorities may decline to open a criminal case.
If you are facing a similar situation, the specialists at Legal Indonesia can conduct a legal review of the documents, assess the prospects of the case, and determine the most effective strategy for protecting your interests under Indonesian law.
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