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General Department of Police warns against the use of cryptocurrencies

November, 17 2017
MPS - Despite official warnings and recommendations from the local authorities, cryptocurrencies still become more and more popular in Vietnam. It is more worrisome as the trading of crytocurrency may lead to many hidden risks, such as fraudulent acts and money laundering, especially when crytocurrency tends to spread toward the countryside.

Lieutenant General Tran Van Ve, acting General Director of the General Department of Police under the Ministry of Public Security said that, according to the current Vietnamese laws on monetary and banking, Bitcoin or other cryptocurrencies are a legal method of payment. At the same time, owning, trading and using cryptocurrencies can generate many risks, such as fraudulent acts, appropriation of property by swindling or money laundering.

The acting General Director of the General Department of Police recommended that organizations and individuals should not invest, own or conduct any transactions related to Bitcoin or other similar cryptocurrencies. The police force will also promote mass dissemination and strictly punish cryptocurrency related crimes, he stressed.

 

 

Currently, there are several Vietnam-based financial cyber floors in Vietnam using Bitcoin, such as Airbitclub, Bitkingdom and BMW. What these financial cyber floors have in common is they officially regard Bitcoin as a monetary product or a means of financial transaction, and trade the cryptocurrency on a multi-level marketing model; that is to say, they take real money from a later buyer to pay for the earlier buyer. To lure more investors, they promise an annual profit of 30% to 80%. The cryptocurrency trading network is taking place in Vietnam spontaneously without licenses by any state agencies.

The police agencies have identified that all servers providing electronic codes are located outside Vietnam. Therefore, the police force is not able to handle any frauds, asset appropriation or cyber violations in cryptocurrency trading.

The police agencies have eliminated a number of online criminal rings with fraudulent acts and appropriation of property in cryptocurrency trading. The Police Department for High-Tech Crime Prevent in coordination with Dong Nai Provincial Police cracked down on an illegal ring that had mobilized capital for cryptocurrencies with their appropriated money amount of up to 140 billion VND, arrested Nguyen Minh Phuong (aged 39, residing in Bien Hoa City, Dong Nai Province) and two other suspects.

The Investigation Police Division of the Bac Tu Liem District Police (Ha Noi) also arrested 3 suspects related to the multi-level network Boss - Bitcoin.com. In Nghe An, the authorities also spotted a number of suspects organizing seminars on cryptocurrrency with the participation of 250 people.

According to the recent announcement of the State Bank of Vietnam on October 28, the issuance, supply, and use of Bitcoin and other similar virtual currencies as means of payment have been prohibited in Vietnam. From January 1st 2018, acts of distributing illegal payment methods, including the use of Bitcoin and other similar virtual currencies, may be subject to criminal prosecution.

At the Q&A session on November 16 of the National Assembly,  the State Bank of Vietnam Governor Le Minh Hung reiterated the State Bank of Vietnam's view saying that that Bitcoin is not a legal currency. "Bitcoin is not also a legal payment method. Therefore, the use of Bitcoin as a payment method is not in compliance with the current laws", said the Governor.

By An Nhien
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