Vietnam: ban on activities related to cryptocurrencies

The Vietnam State Securities Commission has banned companies from issuing or transacting digital tokens. The ban came shortly after the directive to control activity with cryptocurrencies

While many countries around the world are trying to regulate the cryptocurrency industry, there are also those who are skeptical about them. Some even prohibit any activity with digital currencies, not realizing the prospects that this technology can offer. One of these countries is Vietnam.

The State Securities Commission has issued guidance to investment funds and wealth management companies prohibiting them from interacting with cryptocurrencies in any way. The commission cites the fight against money laundering and other risks as the reason.

In July 2018, the State Bank of Vietnam stopped supporting the import of cryptocurrency mining equipment. For Vietnamese people making money through manning or validation, this turned out to be a serious problem. Mining cryptocurrencies is not considered illegal, but using digital currencies as a means of payment is illegal.

The Vietnamese government says these measures were taken to protect citizens from fraud. As a reminder, Vietnamese investors recently lost approximately VND150 trillion ($650 million) as a result of fraudulent activities. In response, the Prime Minister of Vietnam issued a directive increasing control over cryptocurrency activity in the country. All banks, credit and financial institutions, and payment intermediaries must stop supporting cryptocurrency transactions and businesses.

Other countries around the world are trying to address the issue of regulation in a less drastic manner. For example, Malta and Bermuda have already released legislation for the sector, and some countries are still preparing regulatory guidance.