Fri, Apr 13, 2018 - Page 10 News List

Vietnam eyes crackdown after cryptocurrency scam


Vietnam has vowed to tighten regulations on cryptocurrencies as authorities investigate an alleged multimillion-dollar fraud in the country, where digital units are traded in a shadowy and unregulated market.

Paying with cryptocurrencies is illegal in Vietnam, where they are not recognized as a legitimate tender by the central bank, but there are currently no laws explicitly banning the possession of assets such as bitcoin and Ethereum.

A directive signed by Vietnamese Prime Minister Nguyen Xuan Phuc on Wednesday called for new rules to “strengthen the management of activities related to cryptocurrencies.”

It comes after a Vietnamese company, Modern Tech JSC, was accused of scamming US$660 million from tens of thousands of people who bought iFan and pincoin cryptocurrencies, state media reported.

The Ho Chi Minh City-based company promised to repay clients monthly interest — and more if they could attract other customers — but has been slow to pay them back as the value of iFan and pincoin slumps, the online newspaper VNExpress reported.

City authorities have asked police to investigate.

Investing and trading the currencies is “increasingly complicated and threatens to affect the stability of the market, social order... [and] can pose great risks to organizations and individuals involved,” the new directive said.

It warned financial institutions against accepting the currencies and said authorities would “detect and handle” those dealing in the illegal currency.

A cryptocurrency investor in Vietnam said he might consider moving his business elsewhere after the announcement.

“Since the government wants to tighten regulations on cryptocurrency, I might not invest in cryptocurrency in Vietnam, maybe... in other countries,” he told reporters, asking not to be named.

Vietnam last year said it would consider developing a legal framework to manage cryptocurrencies and digital assets.

Exchanges in digital currencies have seen tremendous volatility and sparked concerns that they can be used to launder money for criminal networks.

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