News has emerged of yet another cryptocurrency-related ban — this time in Vietnam. The country’s Finance Ministry is proposing a ban on the importation of cryptocurrency mining rigs. According to the ministry, these mining rigs are used to launch unregulated digital payment methods.
Vietnam Struggles to Get a Handle on Cryptocurrency
The entire spectrum of Vietnam’s digital currency regulations is thus; “cryptocurrencies are illegal in the country.” However, this stipulation hasn’t stopped the occurrence of fraudulent activities in the country.
In April 2018, news emerged of a $658 million ICO scam that defrauded more than 30,000 people. The affected people invested in a company which promised significant returns on the mining of iFan and Pincoin cryptocurrencies.
According to the ministry, mining rigs imported into the country are and were used to create new cryptocurrencies and unregulated payment systems. It is the belief that many of these mining activities are set up to defraud unsuspecting investors. Thus, the ministry is calling for a ban on all mining rig imports to combat the activities of fraudsters.
This proposed ban follows Prime Minister Nguyen Xuan Phuc’s directive for stricter regulation of the market. Based on the directive, credit institutions in the country may not facilitate cryptocurrency transactions. Financial regulators and the Justice Ministry are also responsible for ensuring virtual currency stakeholders abide by the country’s anti-money laundering regulations.
Vietnam’s need for a robust cryptocurrency regulatory framework came to the fore in September 2017. The country’s tax authorities were unable to secure an indictment against a Bitcoin trader who had made quite a fortune, thanks to a lack of legal provisions under which the tax body could charge the trader with tax evasion — highlighting the country’s need for a clear regulatory framework.
Cryptocurrency Mining in Vietnam
Even though cryptocurrencies are illegal in the country, Vietnam imports thousands of mining rigs annually.
According to the General Department of Vietnam Customs, more than 6,300 mining rigs were imported into the country between January and April 2018. Last year, Vietnam imported almost 10,000 mining rigs.
Saigon, Hanoi, and Da Nang are the principal cryptocurrency mining areas in the country.
Will the ban on cryptocurrency mining rigs help the government prevent cryptocurrency-related fraud? Let us know your thoughts on the matter in the comment section below.
Images courtesy of CryptoPrimacy archives.