Vietnam Bans Cryptocurrency Transactions
Following a directive issued by the Vietnamese securities regulatory agency, it is now illegal to deal in digital currencies in the Asian country. Earlier this year, the country’s premier announced that the government would enforce regulatory measures on cryptocurrency companies. As per the local media, the latest order will affect all types of businesses in the crypto sector, including public firms, securities companies, fund management enterprises, and securities investment funds. Besides, such institutions have been ordered to comply with anti-money laundering (AML) standards.
As mentioned above, the order, issued by the State Securities Commission of Vietnam (SSC), is based on a directive given by the nation’s prime minister in April 2018. Notably, the document prioritizes the regulation of the institutions that engage in transactions involving Bitcoin and other virtual currencies. Moreover, the order also explicitly bans the use of cryptocurrencies within Vietnam.
Previous Attempts of Regulating Cryptocurrencies
Previously, there have been several attempts of implementing administrative measures to control the crypto sector in Vietnam. Four months ago, the State Bank of Vietnam (SBV) banned banks and other financial institutions from dealing in digital currencies. In addition, the central bank also cautioned that engaging in such transactions could significantly increase the prevalence of money laundering, tax evasion, trade fraud, and funding of illicit activities such as terrorism and human trafficking.
Last year, the Vietnamese central bank declared a tough stance on virtual currencies, marinating that they are not an acceptable means of payment. To this end, the SBV proposed the deployment of certain countermeasures, including the banning of all transactions involving cryptocurrencies. The proposal further suggested that individuals and institutions that fail to adhere to this ban should face criminal prosecution.
Additionally, the SBV, the Ministry of Finance and the Ministry of Trade and Industry agreed to temporarily ban the importation of cryptocurrency mining hardware. Reportedly, the order was drafted by the Vietnamese Ministry of Finance.
Prevalence of Fraudulent Crypto Projects
In line with the increasing popularity of cryptocurrencies worldwide, there has been a surge of mining activity in Vietnam. In fact, the country has been importing mining rigs in remarkably large quantities of late. As expected, the local government is concerned about the proliferation of this activity. As a precautionary measure, the administration recently conducted a cybersecurity drill whose primary objective was to combat the possible spread of malicious mining software.
Apparently, the main reason for the enforcement of regulations in the crypto space by the Vietnamese government is the infamous history of crypto-related scams in the country. Recently, tens of thousands of investors fell victim to the Ifan and Pincoin cryptocurrency projects, which turned out to be scams.