Ministry proposes tougher bitcoin regulations

The use of bitcoin mining machines has shown complications in management

According to the ministry’s report to the Government on cryptocurrency management, the bitcoin mining machine has not been mentioned in the list of forbidden imported goods, which has made it easy for businesses to import the machine.

However, the ministry said the use of bitcoin mining machines has shown complications in management, with the potential to be used illegally as a currency or in other non-cash payment methods.

Cryptocurrency is considered an illegal non-cash payment method in Vietnam. The use of virtual money as a means of payment is prohibited and will be handled according to the country’s legal regulations.

The MoF cited the example of a case in HCM City to prove shortcomings in virtual money management. An organization based in the city, Modern Tech, reportedly duped 32,000 individuals in an investment of approximately 15 trillion VND (US$666 million) in two fraudulent digital currency projects.

This forced State management agencies to have strict solutions in place on the import of bitcoin mining machines, MoF said.

So far, the country has imported some 15,600 bitcoin mining machines.

These were mainly imported into three major cities - HCM City, Hanoi and Da Nang. Last year alone, more than 9,300 machines were imported, including 2,300 into Hanoi, some 7,000 into HCM City and the remaining into Da Nang.

In the first four months of the year, the country imported more than 6,300 bitcoin mining machines, including 4,300 machines into Hanoi and 2,009 machines into HCM City.

Earlier, Prime Minister Nguyen Xuan Phuc asked the State Bank of Vietnam (SVB), financial institutions and other organizations providing payment brokerage services to intensify inspections and promptly report suspicious cryptocurrency transactions.

PM Phuc issued Directive No 10/CT-TTg on the matter, following repeated warnings from relevant agencies on risks associated with Bitcoin and other cryptocurrencies, along with the threat that cryptocurrencies can be used to finance crimes, such as money laundering, terrorism, tax evasion and fraud.

Meanwhile, cryptocurrency trading and investment are on the rise, posing a threat to the stability of the financial market as well as social order and safety due to the high risks involved.

The PM instructed the Ministry of Public Security to join hands with the SBV and relevant ministries to detect and handle any case of cryptocurrency being used for illegal payment, any activity connected to money laundering and any terrorism-related activity sponsored via cryptocurrency.

The MoF has been asked to study the global experience to recommend solutions to counter initial coin offering. In addition to this, the ministry should work to reduce the import of bitcoin mining machines.

The Ministry of Industry and Trade must channel efforts to address illegal activities related to the use of bitcoin to make payment on e-commerce websites or applications. The Ministry of Justice is responsible for completing a legal framework on the management and settlement of cryptocurrency or crypto assets.