The Infiltration of Corruption and Money Laundering in Indonesia’s Startup Ecosystem

Abstract

The technology startup sector in Indonesia has experienced rapid growth in recent years. Startups are characterized by their reliance on digital transactions, flexible corporate structures, and platform-based business models. However, in 2024, many startups went bankrupt or faced serious internal challenges. One of the primary factors contributing to this situation was weak working capital management, which directly affected corporate liquidity and operational sustainability. Beyond financial mismanagement, a more serious concern has emerged: the misuse of startup business entities as instruments for economic crimes, including corruption and money laundering. This study aims to examine startups implicated as suspects in alleged corruption cases involving the mismanagement of investment funds by MDI Ventures at TaniHub and its affiliates between 2019–2023. In addition, this study investigates suspected money laundering practices involving startups such as eFishery and Crowde, which allegedly engaged in financial manipulation, falsification of investment data, and embezzlement of funds. Using normative legal research methods, this study finds that startups can be exploited as vehicles to conceal or disguise the proceeds of predicate crimes, particularly corruption, by channelling illicit funds into corporate investments. Corporations, including startups, are legal entities that may be held criminally liable, especially in cases involving corruption and money laundering. Accordingly, startups may be charged with money laundering if they are involved in concealing, disguising, or benefiting from the proceeds of criminal activities. Similarly, startups may be implicated in corruption when their business operations are proven to have actively or passively facilitated such unlawful activities. In conclusion, corporations operating as startups may be subject to criminal prosecution under the doctrine of corporate criminal liability. This liability extends not only to the corporate entity itself but also to its employees, directors, commissioners, and shareholders when criminal acts arise from or are embedded in business activities.