Vietnam’s Securities Regulator Bans Financial Firms From Cryptocurrency Activities

News, Regulation | July 27, 2018 By:

The State Securities Commission (SSC) of Vietnam has banned financial companies from engaging in cryptocurrency-related activities.

In an announcement earlier this week, the SSC said public companies, securities companies, fund management companies, and securities investment funds should avoid issuance, transactions or brokerage of cryptocurrencies, adding that they must obey legal regulations on anti-money laundering.

The SCC’s ban is in response to an April 2018 Prime Minister’s directive ordering 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 Prime Minister’s directive has been prompted by two fraudulent initial coin offerings (ICO) that allegedly swindled 32,000 Vietnamese citizens out of a massive $660 million.

In October 2017, the central bank announced that from January 1, 2018, “the act of issuing, supplying, and using illegal means of payment, including bitcoin and other similar cryptocurrencies, may be subject to prosecution,” with fines up to $9,000. In response to the prime minister’s April directive, the central bank also banned commercial banks and payment service providers from making transactions with cryptocurrencies. At the time, the SBV argued that crypto activities could increase the risk of money laundering, terrorism financing and tax evasion.

In a further move to improve the management of crypto transactions in the country, the SBV last week agreed to temporarily suspend imports of cryptocurrency mining equipment. The suspension was proposed by the Ministry of Industry and Trade (MoIT) and the Ministry of Finance (MoF).