Vietnam’s State Securities Commission (SSC) has banned the country’s crypto industry from using virtual coins, local media reported on Wednesday. The decision followed a request from Prime Minister Nguyen Xuan Phuc several months ago.
“SSC banned public companies, securities companies, fund management companies and securities investment funds from taking part in the activities [cryptocurrency transactions], and required them to obey legal regulations on anti-money laundering,” Vietnam News explained.
In April, PM Phuc issued a directive, which instructed governmental and financial authorities to be stricter when managing cryptocurrency-related activities.
The PM said that investing and trading in cryptos, as well as raising capital through initial coin offerings (ICOs) threaten the stability of the financial market and can pose a risk to the organizations and individuals involved.
In June, the Finance Ministry proposed a blanket ban on virtual coin mining rigs because those systems can be used for the creation of new cryptocurrencies, which are very difficult for state regulations. Earlier this month, the central backed this decision.
Why is Vietnam banning cryptocurrencies?
The Vietnamese government’s crypto moves have been prompted by two alleged $658 million fraudulent schemes: the iFan and the Pincoin ICOs, both developed by Modern Tech company.
iFan is a crypto project for a celebrity social network, claiming to be backed by the top Asian stars form Thailand, Singapore, Vietnam, and Malaysia. On its website, the project presents iFan coin as the second most profitable ERC20 token with a price of USD 302 for one coin, although there is no credible source for this information
Pincoin is a project for a community-based virtual coin auction portal. It also offers own ERC20 token, PIN, with a price of USD 1 for one coin. iFan and Pincoin are still operational and offers significant discounts and profit offers of around 40%