Vietnam authorities look for crackdown on unlawful cryptocurrencies after $660 million scam

By Mai Anh - Apr 16, 2018 | 07:26 AM GMT+7

TheLEADERShortly after an accused scam involved in hundreds of millions of dollars and thousands of people, Prime Minister Nguyen Xuan Phuc recently called for rules to strengthen the management on activities related to cryptocurrencies.

Vietnam authorities look for crackdown on unlawful cryptocurrencies after $660 million scam
Investors need to be very carefully when entering the virtual currency market.

The directive “on strengthening the management of Bitcoin-related activities and other cryptocurrencies” was announced to Vietnam’s six ministries.

Accordingly, Prime Minister Nguyen Xuan Phuc requests the State Bank to instruct creditors and intermediary payment service providers not to perform transactions associated with illegal cryptocurrencies as well as to escalate the review and promptly notify suspicious transactions.

The State Bank of Vietnam is called to coordinate with the Ministry of Public Security in discovering and dealing with the behavior of using cryptocurrencies as an unlawful currency or mean of payment.

The Ministry of Finance is requested to instruct public companies, securities companies, fund management companies and securities investment funds not to illegally perform cryptocurrency issuance. 

It has to abide to anti-money laundering laws and propose methods in dealing with initial coin offering (ICO). Besides, this ministry needs to coordinate with related agencies in restricting the import and management of equipment and machinery for mining cryptocurrencies.

The Prime Minister also assigned the Ministry of Public Security to assume the prime responsibility for, coordinate with the Ministry of Industry and Trade and other related ministries in investigating, detecting, preventing and timely handling law violations related to financial mobilization, multi-level business, fraud on the Internet through cryptocurrencies and so on. 

The Prime Minister's strict instruction was issued after last week, Modern Tech JSC was accused of scamming $660 million from 32,000 people buying iFan and Pincoin cryptocurrencies through two allegedly fraudulent initial coin offerings (ICOs).

In details, iFan promises profits of up to 48 per cent monthly through a range of bonus structures that favor early investors over later ones.

Few weeks after the investment, iFan pays the interest as promised but then, the interest cannot be withdrawn due to gradual increase in withdrawal condition. At that time, only a few people were eligible for withdrawal and those with small investment were unable to.

With the constant rise in the condition of interest withdrawal, the credibility of project leaders were definitely questionable. 

However, there was none overreaction as most investors are still hoping to get their interest after meeting the condition. Until December 2017, when many people were qualified for withdrawal, iFan page was closed down.