Vietnam tightens control over cryptocurrencies

The directive follows a cryptocurrency ponzi scheme operated by a Vietnamese IT firm that made headlines last week for allegedly scamming investors out of VND15 trillion ($650 million).

Tax evasion, fraud and money laundering were cited as the reasons for the directive.

Vietnam’s financial and payment organizations are not allowed to provide cryptocurrency transaction services such as credit cards or currency conversion or transfer, the directive stated.

The same organizations have been instructed to report any cryptocurrency transactions and take measures to deal with such cases in accordance with Vietnamese law.

The State Bank also told its branches to cooperate with government agencies to develop a legal framework to deal with the distribution and transaction of cryptocurrencies.

The IT firm that came under fire and sparked the move was Modern Tech, based in HCMC. The company is alleged to have held several conferences to encourage participants to invest in its cryptocurrencies, iFan and Pincoin.

According to the disgruntled investors, the virtual currencies had operated in a similar way to a multi-level business model, or pyramid platform.

In the beginning, Modern Tech paid investors via bank transfers. However, it quickly switched to using its own virtual currencies, while at the same time increasing its minimum investment limit, forcing investors to pour more money in.

At the end of 2017, when interest payments started to come in late, investors started to catch wind of what was happening and staged a protest in front of the firm’s headquarters in HCMC.

Modern Tech representatives have not responded to the accusations, and its founders have remained off the radar.