The State Securities Commission of Vietnam (SSC), the country's stock market watchdog, requested securities trading organizations to refrain from offering services in consulting, brokering, issuing or transacting cryptocurrencies, the commission said on its website on July 23.
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With regard to the management of cryptocurrencies, Deputy Prime Minister Vuong Dinh Hue previously urged investors to remain cautious when investing in new products to minimize potential losses.
Virtual currencies, especially Bitcoin, have sparked fever worldwide. In Vietnam, Bitcoin drew significant market attention despite experts' warning about its risks and the lack of a regulatory framework.
On October 30, 2017, the SBV said virtual currencies are not a lawful means of payment, therefore, "as from January 1, 2018, the act of issuing, providing and using illegal means of payment (including bitcoin and other similar virtual currency) may be subject to prosecution in accordance with the provision of Article 206 of the Penal Code 2015", the bank said in a statement released on October 28.
Given its extreme volatility and lack of regulation, cryptocurrencies in general and Bitcoin in particular can pose potential risks to investors. On the other hand, as explained by the SBV, Bitcoin transactions are anonymous and can be used for money laundering, drug trafficking, tax evasion and illegal payments.
On July 20, the SBV said it agreed with the proposal of the Ministry of Industry and Trade (MoIT) to suspend importing cryptocurrency mining rigs.
In May, the Ministry of Finance proposed a temporary ban on the import of mining rigs, citing the exploitation of those machines for launching new currencies or a new form of payments as reason.
The ministry referred to the allegedly fraudulent initial coin offering (ICO) of Ifan and Pincoin cryptocurrency in April, when 32,000 people lost VND15 trillion (US$658 million) in "Vietnam's largest cryptocurrency fraud". To avoid similar cases, it is thus required to have stricter regulation on the import and use of these types of machinery.
