Vietnam PM Calls For More Gov’t ‘Management’ Of Cryptocurrency Following Scam ICOs

After about 32,000 investors allegedly lost the equivalent of $658 million in two Vietnamese ICO scams, the country’s prime minister called for the proposal of ICO and cryptocurrency regulations.

  • After a Vietnamese company known as Modern Tech Joint Stock Company allegedly perpetuated two ICO scams relating to tokens called iFan and Pincoin, the country’s prime minister, Nguyễn Xuân Phúc, instructed a range of government agencies to take a more proactive role in fulfilling their mandates with regard to cryptocurrency.

    In a directive published on a government website, Nguyễn ordained[LK1]  that:

    “The Ministry of Justice shall assume the prime responsibility and coordinate with the concerned ministries and branches in expeditiously proposing and perfecting the legal framework on management and handling of virtual money and virtual assets; To coordinate with the Ministry of Finance in studying international practices and … proposing measures to raise capital through the issuance of virtual currency (ICO).”

    He also tasked the Ministry of Public Security with preventing entities in the country from using cryptocurrencies to launder money and finance terrorism.

    The alleged scams reportedly netted some 15 trillion Vietnamese động, worth about $658 million at press time, from some 32,000 investors. At one point, protestors gathered outside Modern Tech’s purported headquarters, though reports indicate that the company’s operations were not actually based at that site, and that recent attempts to contact company personnel had failed.

    iFan investors were allegedly promised monthly interest in the 40-50 percent range, to be paid in cash, and assured that they would make back their investments in no more than four months. They were also reportedly told that if they could persuade other investors to buy in, they would receive an 8 percent commission. The minimum investment accepted, according to a report in the Thai publication The Nation, was $1,000.

    After the value of iFan tokens fell to about $.01 apiece, the company began paying out interest in its native assets at a rate that assumed a token value of $5 apiece, rather than in fiat currency.

    The government of Ho Chi Minh City (HCMC), where Modern Tech had claimed it was based, has urged the city’s police force to investigate the fraud claims, and Nguyễn Hoàng Minh, the deputy director of the HCMC branch of the country’s central bank, pledged to cooperate with any police investigation. He also noted, however, that because the central bank does not recognize the legal status of cryptocurrencies, it may lack the requisite standing to help defrauded investors.

     Translations by Google.

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