Thousands of people 'fall into the trap' of virtual currency pyramid schemes

In most cases, when authorities discovered and handled them, thousands of people investing in virtual currency networks were at risk of losing billions of dollars.

In Vietnam, the issuance, supply, and use of Bitcoin and other similar cryptocurrencies (also known as virtual currencies) as a means of payment is prohibited. However, in recent times, many subjects have used sophisticated methods and tricks, even buying or creating websites related to virtual currencies, enticing thousands of people to invest money in buying virtual currencies in a multi-level model to appropriate money.

Most of the time when the case is discovered and handled by the authorities, thousands of people have invested in virtual currency networks and are at risk of losing billions of dollars.

The subjects used propaganda tricks to lure people to pay money to buy AOC codes and lure them in a multi-level marketing style.

From November 19 to 23, Bac Giang Provincial Police coordinated with the Department of High-Tech Crime Prevention (C50 - Ministry of Public Security) to urgently arrest 3 leaders of a virtual currency investment fraud ring called AOC.

At the investigation agency, two people claimed to be the President of the AOC Vietnam Virtual Currency Club, the other person claimed to be the head of the AOC Bac Giang branch. All three subjects confessed to having purchased a website designed as a professional virtual currency site, then drawn up investment packages and lured many people to participate.

Lieutenant Colonel Pham Van Khanh, Deputy Head of the Investigation Security Department, Bac Giang Provincial Police, said that these subjects used propaganda tricks to lure people to pay money to buy AOC codes and lure them in a multi-level marketing style.

Accordingly, the interest rate that participants receive is 0.5%/day, if anyone can persuade others to buy AOC code, they will receive 10-15% commission on the total amount that the next customer participates; If they continue to participate, the original account will double. However, in reality, when people no longer want to participate, they cannot withdraw their money.

“At the time of the investigation by the authorities, the AOC code purchasing network in Bac Giang province alone had about 1,000 participants. Currently, Bac Giang Provincial Police are expanding the investigation, initiating a case, prosecuting the accused and issuing a detention order for investigation. In general, technology crime is a new form, we are continuing to investigate and handle it according to the law. This act is an act of fraud under Article 139 of the Penal Code,” Senior Colonel Pham Van Khanh stated.

At the time of investigation, the AOC virtual currency ring had branches in 10 provinces and cities across the country, and the amount of money that the ringleaders had appropriated was up to tens of billions of dong.

Lieutenant Colonel Nguyen Thi Thu Hang, Head of the E-commerce Department - Department of High-Tech Crime Prevention (C50 - Ministry of Public Security) said that in Vietnam there are still many websites operating under a similar model, which pose many risks to participants.

This is essentially a “financial giving and receiving” model that receives deposits with interest and commissions when introducing more participants. The money is not put into production and business to create profits, but only taken from later participants to pay previous participants.

In essence, it is a disguised multi-level marketing scheme, offering “huge” interest rates of 30-80%/year. Virtual currency trading networks in Vietnam take place spontaneously, with individuals buying and selling virtual currencies without registering with any state management agency.

“The methods and tricks often target people in remote areas who are not updated with the types of virtual currency, only looking at the commissions paid by the subjects, without finding out whether the currency is legal or not. Meanwhile, the State Bank announced that it is not allowed to circulate electronic money and virtual currency,” said Lieutenant Colonel Nguyen Thi Thu Hang.

Bitcoin is considered "digital gold".

To date, digital currencies such as Bitcoin and other similar virtual currencies are not accepted in Vietnam. Recently, the State Bank affirmed that the issuance, supply and use of Bitcoin and other similar virtual currencies are illegal and will be subject to administrative fines of VND150-200 million.

In particular, from January 1, 2018, acts of issuing, supplying, and using illegal means of payment (including Bitcoin and other similar virtual currencies) may be subject to criminal prosecution according to the provisions of Point h, Clause 1, Article 206 of the 2015 Penal Code (amended and supplemented in 2017).

According to Lawyer Chu Khang (Hanoi Bar Association), legally, transactions, investments, and businesses related to virtual currencies are not protected by Vietnamese law. Therefore, people and investors need to be extremely cautious with this business network.

“The State Bank has confirmed that virtual currency is not accepted in Vietnam, and business activities are illegal. In addition, multi-level marketing online without a license is even more illegal. The leader of this business network that causes damage will be handled according to the law. State agencies have warned many times, but if people do not research carefully and still participate, it is very risky,” said Lawyer Chu Khang.

The virtual currency fever, especially Bitcoin, has not shown any signs of cooling down. From a price of about 13 USD in 2013, the current Bitcoin exchange rate has increased many times, even recently, for the first time Bitcoin surpassed the 10,000 USD mark. Since the beginning of the year, Bitcoin has increased in price 10 times. This is also the time when subjects can easily take advantage to buy or set up virtual currency trading websites, attracting many people to participate.

Therefore, people should be cautious and wary of tricks that promise commissions and profits, because there are many risks of buying virtual money and losing real money./.

According to VOV