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Vietnam Edges Closer to Crypto Crackdown

Tim Alper
Last updated: | 1 min read

Vietnam with population of 93 million could be on the verge of a China-style crackdown on cryptocurrencies, with the country’s prime minister, central bank and finance ministry all poised to create a regulatory framework for Initial Coin Offering (ICO) issuance. The country may also outlaw cryptocurrency transactions and restrict or ban cryptocurrency mining.

Source: iStock/visualspace

Van Nguyen, an accountant in the Vietnamese city of Hai Phong, told, “Cryptocurrencies were the talk of the town up until a few weeks ago, with everyone seemingly advising friends and collagues to start investing or mining. However, the mood here has changed pretty fast.”

The moves come after the operators of two large bogus ICOs in Ho Chi Minh City appeared to have fled the capital with some USD 658 million worth of investors’ money. An estimated 32,000 people invested in the phony ICOs, with many taking to the streets to protest outside the issuer’s now-deserted offices. The country’s Deputy Prime Minister last week instructed six ministries to take immediate counter-measures.

The country’s central bank has previously banned the use of bitcoin and other crypto-currencies as means of payment, imposing fines of up to USD 8,800 on companies or individuals attempting to conduct unauthorized transactions in cryptocurrency.

However, per a new directive issued by Prime Minister Nguyen Xuan Phuc, individuals violating regulations could now be hit with fines of double this amount.

Under the new directive, the central bank will work with the Ministry of Public Security to prevent financial institutions, brokers and payment services from conducting cryptocurrency-related deals.

Per media reports, the city of Hanoi will also seek to ban or limit cryptocurrency usage as part of e-commerce deals.

The country’s government is also currently considering a ban on imported cryptocurrency mining hardware. Last month, the HCM City Power Corporation, acting in conjunction with the country’s Ministry of Industry and Trade, told companies and individuals who mine cryptocurrency they would have to pay higher business rates for their electricity usage.