Vietnam’s financial regulator bans local firms from cryptocurrency activity
In a blow for the cryptocurrency community, Vietnam’s financial regulator has banned local businesses from engaging in any issue, transaction or brokerage activities related to virtual currencies. Though there is an effective cryptocurrency ban in place in the country, the latest development will most likely extinguish any hopes for a potential reprieve from the restrictions imposed by the government in recent days.
Under the new rule, State Securities Commission has banned public companies, securities companies, fund management companies and securities investment funds from taking part in cryptocurrency-related activities, and required them to obey legal regulations on anti-money laundering, according to a report by the state-run news outlet Vietnam News Agency.
The move comes months after the country’s prime minister signed a directive which strengthened the legal framework for effectively managing virtual currencies. The government has also outlawed the use of digital currencies as a means of payment in Vietnam.
“All cryptocurrencies and transactions in cryptocurrencies are illegal in Vietnam,” Le Dong Phong, the police chief of Ho Chin Minh City, told news agency Reuters.
Moreover, the country’s central bank had also restricted commercial banks and payment services providers from making transactions using cryptocurrencies. The ban was imposed as a cautionary measure to reduce the risks of money laundering, terrorism financing and other illegal activities.
Additionally, the country’s financial, trade and other ministries have agreed to suspend the import of cryptocurrency mining machines.
“Cryptocurrency investment and trading and raising money through initial coin offerings are evolving in a more complicated manner,” the government said in a statement in April.
Modern Tech JSC cryptocurrency scam
The increased scrutiny and regulation was adopted after the Vietnam News Agency reported that authorities in Ho Chi Minh City had asked police to investigate accusations that Modern Tech JSC – a startup – raised money from token sales of the cryptocurrencies – Ifan and Pincoin.
People who accused the company said that it was involved in one of the largest ever cryptocurrency fraud involving 15 trillion dong, which is just under $650 million.
Strangely, the startup has disappeared from the spotlight after scamming around 32,000 people with two fake cryptocurrency projects and their initial coin offerings (ICOs). The infuriated investors protested in front of the company’s office in April, demanding refunds of their investments, to no avail.
Image via Shutterstock
Join our Telegram group