Ministry of Industry and Trade: Importing cryptocurrency mining machines should not be banned.

In a document sent to the Prime Minister, the Ministry of Industry and Trade recommended that the Government not apply the measure to ban imports of automatic data processing machines (cryptocurrency mining machines) with HS classification code 8471.80.90, as previously proposed by the Ministry of Finance.

The Ministry of Industry and Trade stated that, based on practical analysis, the scope of impact if imports of this HS code group are stopped is very wide. According to statistics from the General Department of Customs, in 2017, more than 27,239 products with this HS code were imported into Vietnam, and in the first five months of 2018, more than 15,117 products with this HS code were imported.

"Suspending imports while the Ministry of Finance has not yet specifically determined the HS code for the goods requiring management is inconsistent with the regulations in the Law on Foreign Trade Management regarding the freedom of import and export business and the application of temporary import suspension measures," the Ministry of Industry and Trade stated.

Furthermore, the machines and equipment used for cryptocurrency mining are multi-purpose items, used for various purposes depending on the user. The Ministry of Industry and Trade is concerned that halting imports will have a negative impact, affecting the production and business activities of enterprises that use this equipment.

Citing a report from the Ministry of Information and Communications, the agency stated that cryptocurrency mining is not only carried out using automated data processing machines, but also on mobile devices, cloud platforms, and hard drive mining. In the future, with the explosive development of technology, the variety of cryptocurrency mining machines and mining activities will increase. Therefore, the Ministry of Information and Communications believes that, until a specific HS code is determined, only the import of ASIC cryptocurrency mining machines (specialized mining machines manufactured for cryptocurrency mining) should be temporarily suspended, and this measure should not be applied to VGA mining machines (machines with functional blocks assembled like regular PCs).

Furthermore, current legislation lacks specific regulations on domestic management measures for virtual currencies, as well as the production, business, and use of automated data processing machines for cryptocurrency mining.

Therefore, the Ministry of Industry and Trade assesses that a temporary import ban, if implemented, would not be effective and would not achieve its management objectives due to the diversity of cryptocurrency mining equipment, especially in the era of the 4.0 industrial revolution and the information technology boom.

Furthermore, the Ministry of Industry and Trade proposes that the Government assign the Ministry of Finance to lead and coordinate with other ministries and agencies to research, classify, and assign appropriate HS codes to automatic data processing machines as a basis for applying appropriate management measures.

The Ministry of Justice, in coordination with the Ministry of Information and Communications, the Ministry of Public Security, the State Bank of Vietnam, and other relevant ministries and agencies, will research and develop a legal framework and submit it to competent authorities for promulgation of legal documents to strictly manage and regulate sanctions for violations related to mining, trading, and investing in virtual currencies and other similar products.

In April, Prime Minister Nguyen Xuan Phuc issued a directive requiring strengthened management of activities related to Bitcoin and other cryptocurrencies. This directive was issued amidst a surge in investment and trading activities in cryptocurrencies, fundraising through initial coin offerings (ICOs), and the use of cryptocurrencies for multi-level marketing schemes, posing risks and disrupting social order.

Most recently, regarding the cryptocurrency business model, in April, dozens of investors gathered at the headquarters of Modern Tech Joint Stock Company on Nguyen Hue Street, District 1, Ho Chi Minh City, displaying banners accusing the company of misappropriating over 15,000 billion VND through soliciting investments in the cryptocurrencies iFan and Pincoin (with promised interest). The 15,000 billion VND was explained as the equivalent of 650 million USD raised through successful ICOs (fundraising) for iFan, Pincoin, and other cryptocurrencies represented by Modern Tech.

Faced with shortcomings in the management and operation of cryptocurrency businesses disguised as multi-level marketing schemes, defrauding the public, in June 2018, the Ministry of Finance proposed temporarily suspending the import of cryptocurrency mining machines and received majority support from various ministries and agencies.

The Government Office has issued a document conveying the directive of Deputy Prime Minister Trinh Dinh Dung on strengthening the management of activities related to Bitcoin and similar virtual currencies. The Deputy Prime Minister assigned the Ministry of Industry and Trade to take the lead, in coordination with the Ministry of Finance and relevant agencies, in researching and considering a proposal to halt imports of these currencies.