Crypto Mining Firm CEO Disappears With $35M USD In Investor Funds

Crime, News | July 31, 2018 By:

Le Minh Tam, chief executive of Vietnam-based crypto mining startup Sky Mining, has reportedly disappeared with investor funds totaling about $35 million.

Local news outlet VNExpress reported that about 20 investors complained to local police in the Phú Nhuận District after learning that Sky Mining had shut down its main office and removed all branding from its building. They believe Tâm run away with $35 million from investors.

Tam allegedly promised investors a return of 300 percent in 12 months for an investment of between $100 and $5,000. Investors would also receive a mining device, which they would use for 15-18 months before returning it to the company. On July 26, several investors went to the company’s factory in the neighboring Dong Nai Province’s Bien Hoa Town to collect their machines, but they found that all 600 mining machines had been taken away by a group of people claiming to be maintenance workers.

In an interview with the local media, Le Minh Hieu, deputy chairman of Sky Mining, said it was possible that Tâm stole the mining rigs along with the funds. He said they are forming a temporary board to “support investors and calculate the remaining asset[s] of the company.”

“[The board] has reported this to the police and showed evidence that we are not guilty,” Hieu said. “We are victims, too.”

After two days of hiding, Tam posted a 44-second video on Telegram claiming he was receiving medical treatment and promised to return investors funds. He also said that the market was unpredictable, mining rig value had dropped drastically and profitability had fallen, adding that his “last resort is to stay hidden from public to protect my life.” Sky Mining officials, however, said that they had not been in contact with the CEO, and the mining machines remain missing.

Crypto mining has been on the rise in Vietnam. Last month, the General Department of Vietnam Customs reported that the country imported more than 6,300 application-specific integrated circuit (ASIC) devices, which are used to mine cryptocurrencies such as bitcoin and ethereum, in the first four months of this year. Last year, more than 9,300 mining rigs were imported into Vietnam, most of which went to Ho Chi Minh City and Hanoi capital.

In April of this year, Vietnam Prime Minister Nguyen Xuan Phuc asked the State Bank of Vietnam (SBV), the Ministry of Public Securities and other bodies to tighten the “management of activities related to bitcoin and other cryptocurrencies.” The directive has been prompted by two fraudulent initial coin offerings (ICO) that allegedly swindled 32,000 Vietnamese citizens out of a massive $660 million. Earlier this month, SBV banned financial companies from engaging in cryptocurrency-related activities.