Prime Minister signs directive on strengthening management of cryptocurrency

The action came after the media reported an alleged cryptocurrency fraud involving VND15 trillion (US$666 million) and affecting 32,000 people in HCM City. - Photo venturebeat.com

The move comes after media reported an alleged cryptocurrency fraud worth VND15 trillion (US$666 million) affecting 32,000 people in Ho Chi Minh City.

Authorities have previously repeatedly warned about the risks associated with bitcoin and other digital currencies, as well as its use for criminal activity such as money laundering, terrorist financing, illegal remittance, tax evasion and fraud.

As these currencies are digital and pseudo-anonymous with no government backing, investment and trading activities, as well as raising capital through initial coin offerings (ICO) especially in a multi-level marketing mode, are getting complicated and risky and affecting the stability of the financial market and social order.

To limit the risks and adverse impacts on society, as well as promptly detect, prevent and handle fraud, the Prime Minister asked the State Bank of Vietnam (SBV) to direct credit institutions and intermediary payment service organisations not to conduct illegal transactions related to digital currencies.

These organisations must also strengthen their management, review and report suspicious transactions related to cryptocurrencies.

The SBV will work with the Ministry of Public Securiy to handle acts of using cryptocurrency a means of payment, which is against Viẹt Nam’s law.

The Ministry of Finance will direct public companies, securities firms, fund management companies and securities investment funds not to carry out the illegal issuance, transactions and brokerage activities related to virtual money.

The ministry was tasked with researching international experience to propose practical measures to manage ICOs.

The import of hardware used to mine virtual money should also be restricted, the directive said.

The ministries of Public Security, Industry and Trade, Information and Communications, and Justice should also intensify the investigation, detection, prevention and handling law violations related to raising capital and financial activities in form of multi-level marketing scams online related to cryptocurrency.

Ministries and local authorities must increase the dissemination of information on the risks of investing and trading in virtual currencies.

Legal framework needed

The Government Office yesterday issued a letter conveying Deputy Prime Minister Vuong Dinh Hue’s direction on improving and completing the legal framework for the management of virtual currency.

The Deputy PM assigned the Ministry of Justice to study and complete legal frameworks based on opinions from the ministries of Finance and Information and Communications and the State Bank of Vietnam.