Medan, Indonesia – Indonesian influencers Indra Kesuma and Doni Salmanan live the life most people can only dream of.

On his now-deleted Instagram, Kesuma, 25, also known as Indra Kenz, regularly posts pictures of himself posing next to luxury cars and sports designer watches and clothes.

In January, Kesuma, from Medan, North Sumatra, delighted viewers with a story of buying a $30,000 T-shirt when he appeared on the TV show Crazy Rich Indonesia, while 23-year-old Bandung Salmanan boasted of giving away $100,000 to an online site. Dollar. The player simply because he has nothing better to do.

Kesuma and Salmanan attribute their extravagant wealth to the successful trading of Binomo and Quotex, respectively, two binary options trading apps that allow users to bet on the rise and fall of stocks within a strict time limit for a chance to win a fixed amount.

But while Kesuma and Salmanan claimed they made a fortune on the apps, dozens of others said they lost huge sums in what Indonesian authorities called an elaborate financial scam.

When Kesuma was arrested by Indonesian police in February, just a month after state television talked about his self-made fortune, he swapped his designer T-shirt for an orange jumpsuit. Police arrested Salmannan the following month.

Both now face charges of fraud, online gambling, money laundering and violating Indonesia’s Electronic Information and Transactions Act (ITE) by spreading so-called fake news. At a news conference last month, Kesuma and Salmanan apologized for their actions and said they hoped their arrest would serve as a warning to other potential investors.

Lawyers for Kesuma did not respond to a request for comment, and Al Jazeera’s attempts to contact Salmanan’s legal representative were unsuccessful.

Earlier this year, Doni Salmanan appeared on the TV show Crazy Rich Indonesia [File: Instagram @donisalmanan_real]

“It’s not just the Indra Kenz and Binomo cases that we need to focus on,” Adinova Fauri, an economist at the Centre for Strategic and International Studies (CSIS), told Al Jazeera.

“The practice of illegal online trading platforms in Indonesia is increasing, despite the government’s ongoing attempts to stop them.”

According to police reports filed by alleged victims, the problems with the apps started once users signed up with an affiliate code provided by Kesuma and Salmanan.

“The ‘transaction’ mechanism used by Binomo was clearly unreasonable from the start,” Vinsensius Sitepu, a financial journalist and private investor, told Al Jazeera.

“The data varies between users, and the time horizon for choosing whether to go up or down is very short. There are user accounts that are suddenly closed, funds cannot be withdrawn, etc.,” Sitepu said.

“The Binomo system seems to be designed to keep users losing.”

At a press conference last week, authorities announced they had identified 118 alleged victims who collectively lost more than 72 billion rupiah ($5 million).

Police also confiscated luxury cars and assets worth approximately $8.25 million from Salmanan and Kesuma.

“Actually, Doni Salmanan is not trading on the website, just an affiliate that benefits from the membership,” Brigadier General Suhri told a news conference.

“The bigger the profit, the bigger the risk”

According to investigators from Indonesia’s cybercrime unit, Kesuma and Salmanan received 80 percent of the funds users lost when they registered trading accounts with an affiliate code provided by the pair.

Before his arrest, Kesuma had attracted more than 200,000 members to a Telegram group used to attract new Binomo users, while Salmanan’s Quotex Telegram group had more than 25,000 users.

“Although Binomo and other rogue apps have long had issues, the police have been negligent and slow in dealing with this,” Sitepu said, adding that many people are particularly vulnerable during the pandemic because they “have disengaged” working or not earning as much as usual”.

“They should have closed at an earlier stage.”

Zamroni Salim, head of the Macroeconomics and Finance Research Center at the National Research and Innovation Agency (BRIN), said the case shows that Indonesians need to be more cautious when investing.

“The case against Binomo and Indra Kenz is because of public complaints that they think they are losing money because of this investment. But that doesn’t need to happen,” Salim told Al Jazeera.

“There is a saying in trading: Invest only what you can afford to lose. This is one of the fundamentals of investing, in the name of investing there must be risk. The greater the potential profit, the greater the risk, but Indonesians are often vulnerable to grand Bewitched by temptation, especially when it is communicated or promoted by celebrities and public figures.”

Fauri, an economist at CSIS, said binary trading sites are particularly attractive because they connect with influencers who live seemingly extravagant lifestyles.

“Public figures advertise these products, and it attracts people and combines with a lack of digital literacy,” he said. “It has to change. They should only advertise products if they are licensed or licensed by the Indonesian Financial Services Authority (OJK) or Commodity Futures Trading Regulatory Authority (Bappebti).”

While both Salmanan and Kesuma face up to 20-year bans, authorities appear to be powerless about the apps themselves, as they have no physical presence in Indonesia.

While the police investigation continues, it is unclear whether the platforms were involved in the alleged fraud by Salmanan and Kesuma.

Binomo is registered with Dolphin Corp in Saint Vincent and the Grenadines, Caribbean, while Quotex is registered in Seychelles. The ownership of these companies remains unclear.

Police said Sammanan and Kesuma declined to confirm whether they worked for anyone else, although they suspected more people were involved.

In 2021, Binomo was the fourth most downloaded financial app in Indonesia, although it has since been blocked and is no longer available on the Google Play Store or Apple App Store.

Quotex and hundreds of similar binary trading sites are also blocked in Indonesia. Binomo and Quotex did not respond to requests for comment.

“As long as the company is still somewhere, Binomo can still continue its activities,” Sitepu said. “Without cooperation between countries, it is very difficult for such an application to stop.”

“If we see Binomo as a snake, we need to decapitate it. So far, all we’ve got is the tail.”