Dec 03, 2020 / 15:48

Central Bank warns of illegal forex trading

Investments in forex trading platforms, seen as illegal, would not be protected by law, said a senior official of the central bank.

Credit institutions with permission from the State Bank of Vietnam (SBV) are the only ones allowed to provide foreign exchange (FX) trading and derivatives services on the domestic and international markets.

 Vice Governor of the State Bank of Vietnam Dao Minh Tu at the press briefing. Photo: Nhat Bac. 

Investors should be cautious in participating in illegal forex trading platforms, said SBV’s Vice Governor Dao Minh Tu at a monthly government’s press briefing on December 2, referring to the case of growing numbers of such platforms are calling for investment with promises of soaring profit.

“So far, local authorities have not issued licence for any forex trading floor. Therefore, all transactions on these floors are illegal,” stressed Mr. Tu.

“Individuals investing in these platforms, seen as violating laws, would not be protected by law,” he noted.

Mr. Tu said during the Covid-19 crisis, legal businesses anywhere around the world could hardly guarantee profit of up to a couple of dozen percent, let alone promises for profit of hundreds of percent per year, which is a sign of fraud.

Vice Minister of Industry and Trade Do Thang Hai noted forex trading platforms in Vietnam are form of illegal multi-level marketing activities that pose high risks in terms of assets losses for investors.

“Those participating in these activities could be subject to a penalty of up to VND5 billion (US$217,500) or five-year jail term,” Mr. Hai stressed.

Some investors admitted greedy is a major reason for them to participate in forex trading activities. However, they argued a lack of legal framework regulating such activities has directly led to a growing number of such platforms operating publicly and attracting ill-informed investors.