'Falling into the trap' of virtual currency Bitcoin will not be protected by law in Vietnam

As a global entity and not controlled by any Government, Bitcoin is increasingly attracting risk-taking speculators.

Bitcoin, the virtual currency, rose to a record price of over $5,000 per Bitcoin in early September, marking a sharp increase from its price of just $1,000 at the beginning of the year. Bitcoin is also notorious for its volatility, having seen a tenfold increase from $100 to $1,000 in 2013.

However, in recent days, Bitcoin has dropped quite sharply in the market as investors have sold off and is currently trading at $3,855. Negative signals from China calling for a crackdown on the Bitcoin market or criticism from JPMorgan CEO about Bitcoin have caused this virtual currency to fall dramatically. However, this is still a virtual currency that many investors are interested in.

Not a "golden goose"

In Vietnam, Bitcoin has attracted a lot of attention since 2013 and has become more popular since 2014. Many seminars have been held to attract people to spend real money to buy virtual currency to become "millionaires and billionaires".

That is why many people have lost their fortune because they were gullible and believed in the promises of a life-changing dream from the organizers of the Bitcoin and Onecoin virtual currency trading lines.

Ms. Nguyen Thu Thuy (Hoang Mai - Hanoi) said that she had a relative in Ho Chi Minh City who called her many times to invite her to play Bitcoin and also painted a "billionaire dream" for her. When he could not convince her to play, this person turned around and said "if you just stick to your salary, when will you get rich? Don't you see that people have mansions and cars all over the streets?" Despite this, Ms. Thuy still firmly refused to participate.

However, not everyone is as alert as Ms. Thuy. Mr. Vu Van Long (Gia Lai province) said that in early 2015, he was advised by some people to participate in this banking trading floor to earn profits very quickly without much effort, so he was curious and tried it out.

“At first, I only joined with a package of 10 million VND, then I saw that I could receive interest quickly without any effort, so I borrowed more than 200 million VND to invest. Who would have thought that more than 1 month later, this trading floor suddenly disappeared. Now I can't find any interest, the principal is also gone and I don't know who to ask for help from," Mr. Long said sadly.

According to the investigation of the High-Tech Crime Prevention Police Department (PC50) - Hanoi City Police, most of the participants are easily lured and lured into this network by bad guys because they are "played" on greed with the mentality of "doing nothing but still having money".

The form of capital mobilization for virtual currency investment is also used as multi-level marketing. Initially, the subject may pay interest to investors very fairly, but when investors "fall into the trap" and invest a large amount of money in virtual currency, the operator will crash the system, delete data, appropriate customers' money and then disappear.

Specifically, to participate in the system, members pay a minimum initial amount of 1 Bitcoin (approximately worth 10 million VND) and will receive a daily profit of 1%/month, a monthly profit of 30%/month, and a profit after 3.5 years of more than 1 million USD.

In addition, the subjects also "encouraged" members to participate in high-value packages to quickly gain profits. If participating in the 200 million VND package, after 3.5 months, members will have doubled their investment to 400 million VND and immediately withdraw their capital of 200 million VND. If they continue to invest after 3.5 years, members will have nearly 100 million USD in profit.

In early 2017, PC50 received dozens of complaints from individuals about their loss of about 30 billion VND due to investing in virtual currency Bitcoin. The police arrested a number of individuals who committed fraud and property appropriation related to virtual currency.

Gia Lai Provincial Police also received hundreds of people reporting that they were lured into participating in a multi-level virtual currency trading model called “Bitcoin community bank” with amounts up to hundreds of billions of VND.

Or like C50-Ministry of Public Security in coordination with Dong Nai Provincial Police, they have dismantled a high-tech capital mobilization ring with an amount of money embezzled up to 140 billion VND, and at the same time arrested the ringleader Nguyen Minh Phuong (39 years old, residing in Bien Hoa city, Dong Nai province), and two accomplices.

It is known that not only in Gia Lai province, but many people in Kon Tum, Dak Lak, Dak Nong, Dong Nai provinces and Ho Chi Minh City are also in the same situation.

Bitcoin management will be tightened

At the end of August, virtual currency in Vietnam received special attention from the public when the Prime Minister issued Decision No. 1255/QD-TTg approving the Project on Completing the Legal Framework for Managing and Handling Virtual Assets, Cryptocurrencies, and Virtual Currencies.

The project clearly states that the assessment report on the current situation to amend the legal framework must be completed before August 2018 and that by the end of 2018, legal documents on virtual assets and virtual currencies must be developed. At the same time, by June 2019, the dossier requesting the development of a legal framework on taxes on virtual assets and virtual currencies must be completed. In addition, the Government has assigned proposals to prevent and handle violations related to this type of currency to be completed before September 2019.

Immediately, virtual currency investors expressed their opinion that virtual currencies like Bitcoin will be recognized by Vietnam and the legal framework will soon be revised to have a suitable management form.

However, the view of the State Bank - the monetary management agency - is different.

Mr. Nghiem Thanh Son, Deputy Director of the Payment Department of the State Bank, said that not only now but 3 years ago, the State Bank issued a press release about Bitcoin and other similar virtual currencies, in which it affirmed: Bitcoin (and other similar virtual currencies) is not a currency and is not a legal means of payment in Vietnam.

"Owning, buying, selling, and using Bitcoin (and other similar virtual currencies) as an asset poses many risks to people and is not protected by law," Mr. Son emphasized.

According to Mr. Son, to complete the Project assigned by the Government, the State Bank will monitor and study international experience as well as Vietnam's practices to propose measures and policies to perfect the legal and management framework for cryptocurrencies as well as coordinate with the Ministry of Justice and ministries and branches to propose appropriate management measures for virtual assets and virtual currencies in the coming time according to the roadmap approved by the Prime Minister.

Agreeing with the above viewpoint, Dr. Nguyen Thi Kim Thanh, former Director of the State Bank Strategy Institute, also said that this is necessary and timely. Because from a certain perspective, once virtual currencies grow rapidly, it will more or less affect the total means of payment of the country, thereby also affecting market interest rates, economic growth and inflation. That is not to mention crimes such as money laundering, drug trafficking, tax evasion, and other illegal transactions... through these forms of virtual currencies.

The police also recommend that people should not participate in transactions or payments of virtual currency online without going through the credit institution system, to avoid becoming victims of crime. People participating in transactions or payments of electronic money, if they encounter risks or disputes, will not be protected by the law, and may even be jointly liable when transacting with criminals.

According to Hanoi Moi Newspaper