Vietnam PM Calls for Stricter Crypto Regulations

The tougher measures are a response to a crypto fraud worth millions of US dollars.

by Kalina Tekelieva
12 April • 3 min
In News

In a directive published on Wednesday, Vietnamese prime minister Nguyen Xuan Phuc asked governmental and financial authorities to be stricter when managing cryptocurrency-related activities.

Nguyen claims that investing in and trading with virtual currencies, as well as raising capital through initial coin offerings (ICOs) threaten the stability of the financial market and can pose a risk to the organizations and individuals involved.

Therefore, the prime minister requires from the State Bank of Vietnam to scrutinize all transactions related to digital currencies that seem murky. In addition, he asked the ministries of public security, finance, industry and trade, justice, and communication to monitor any potentially unlawful crypto activities in the respective spheres.

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Million-dollar ICO scam

The directive, announced on the official government website, comes after a Vietnamese company was blamed for a huge virtual scam earlier this week. Ho Chi Minh City-based Modern Tech allegedly stole VND 15 trillion (over USD 658 million) in two ICOs, local daily Tuoi Tre News reported on Monday. The scam is said to have affected 32 000 people.

According to the publication, Modern Tech is the company authorized to raise funds for the digital tokens iFan and PinCoin in Vietnam. The iFan project is said to represent a social network for celebrities and artists, while PinCoin is marketed as an investment opportunity.

Official investigation

The fraud allegations prompted deputy prime minister Vuong Dinh Hue to order an investigation of the scam. As disclosed on the prime minister’s website on Wednesday, Vuong asked several ministries to handle the case. A separate statement, published today, revealed that the Ministry of Public Security has been investigating the iFan token for over three months.


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Crypto regulations in the region

Digital currencies have experienced a considerable growth in popularity in Asia in the past years and this led local governments to ponder on how to regulate the crypto industry. Different approaches have been adopted so far.

While China decided to close digital currency exchanges and to ban ICOs, Japan was the first country to supervise virtual marketplaces on a national level. At the same time, South Korea has not yet concluded how it will proceed with crypto regulations. Virtual currencies are not officially regulated in Singapore either.

As for Vietnam, it remains to be seen what will follow the step made by prime minister Nguyen.