Vietnam Turns Tough on Cryptos after Alleged $658M Fraud Read more: https://cryptovest.com/news/vietnam-turns-tough-on-cryptos-after-alleged-658m-fraud/

The government of Vietnam is taking a tough stance on cryptocurrencies after a local company defrauded people of about $660 million.

author by Anatol Antonovici, 1 hr ago
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Vietnam’s Deputy Prime Minister Vuong Dinh Hue has ordered six ministries to launch an investigation into an alleged crypto scam that involved the digital equivalent of $658 million, according to an announcement on the government’s online portal. The ministries were told to “quickly consider and tackle” the fraud.

Early in April, Prime Minister Nguyen Xuan Phuc required of the central bank and local regulators to update legislation to “strengthen the management of activities related to cryptocurrencies.” The PM wants local companies to steer clear of cryptocurrency transactions as they are currently illegal. The Bank of Vietnam officially banned the use of Bitcoin and other cryptocurrencies in October last year.

The deputy PM’s order came after local company Modern Tech was charged with bilking nearly $660 million from tens of thousands of individuals who purchased iFan and Pincoin tokens. The company had pledged to pay customers monthly interest and other bonuses for bringing in new clients. The only condition was to invest at least $1,000 in the coins. However, it failed to keep the promise once the token prices collapsed.

The authorities in Ho Chi Minh City, where the company is headquartered, had asked the police to get involved. Before the request, dozens of people protested at the weekend, accusing Modern Tech of “the largest ever cryptocurrency fraud involving 15 trillion dong.”

Le Dong Phong, head of Ho Chin Minh City police, told Reuters:

“All cryptocurrencies and transactions in cryptocurrencies are illegal in Vietnam. We are gathering information about the case, but officially we haven’t launched an investigation until we receive accusations from any of the alleged victims.”

He refused to go into more detail.

In reaction to the alleged scam, the PM sent a directive to the State Bank of Vietnam, asking it to instruct financial institutions to stay away from providing cryptocurrency trade solutions.

He also required of the Ministry of Public Security to identify and prevent illegal operations that relate to cryptocurrency-based money laundering and terrorist financing.

The Ministry of Justice was told to come up with a legal framework dedicated to digital currencies.

A local crypto investor said he might take his business outside Vietnam in light of these developments.

“Since the government wants to tighten regulations on cryptocurrency, I may not invest in cryptocurrency in Vietnam, maybe... in other countries.