The Hanoitimes – Securities trading organizations should refrain from offering services in consulting, brokering, issuing or transacting crypto currencies, according to the State Securities Commission of Vietnam (SSC).
Securities trading organizations should refrain from offering services in consulting, brokering, issuing or transacting crypto currencies.
Deputy Prime Minister Vuong Dinh Hue has asked the Ministry of Justice and the State Bank of Vietnam (SBV) to quickly complete the legal framework and report to the government. The documents should be presented to the government for consideration by the end of the month, according to the SBV.
The statement also referred to business activities of Fintech firms with regard to the fundraising method through initial coin offering (ICO), as well as other activities in relation to Vietnam’s stock market.
At present, there is a growing trend in Vietnam for Fintech firms to raise capital through ICO, crowdfunding or peer-to-peer lending. However, these activities pose high risks with no law available for protection.
SSC requested investors to remain cautious when investing in new products to minimize potential losses.
Virtual currencies, especially bitcoin, have sparked fever worldwide. In Vietnam, the bitcoin drew significant market attention despite experts’ warning about its risks and the lack of a management framework.
On October 30, 2017, 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”, SBV said in a statement released on October 28.
As a ministry-level body of the government responsible for managing monetary policies, supervising financial institutions and keeping the country’s foreign reserves, SBV urged citizens and enterprises to refrain from making transactions in bitcoin and other crypto currencies.
Given its extreme volatility and lack of regulation, crypto currencies 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.
China and South Korea recently announced moves to tighten the management of bitcoin. Vietnam could be the next country to issue strict regulations on crypto currencies.