Recently, Vietnam joined the league of nations that restrict the operations of digital currencies due to cases of fraud and scams running rampant in the nation’s cryptocurrency market. The Vietnam Ministry of Finance (MoF) recently issued a temporary but blanket ban on the imports of cryptocurrency mining equipment this week, local reports say.
The decision to issue this interim restriction was made by the finance ministry on the basis that cryptocurrencies are “difficult to regulate” the new cryptocurrencies and forms of payments in tokens created by mining hardware.
According to the Hanoi Times, the sudden move by the government is because of the recent cases of fraud in Vietnam’s crypto scene, which resulted in over 32,000 investors losing a whopping total of $658 million. The fraudulent Initial Coin Offerings (ICOs) were perpetrated by the Ifan and Pincoin cryptocurrencies in April, and were dubbed the “Vietnam’s largest cryptocurrency fraud”.
Due to the devastating frauds, Vietnam’s Prime Minister’s office decided to order various government authorities – including the central bank and several ministries – to increase the amount of supervision over “activities related to bitcoin and other cryptocurrencies” starting April 2018.
Below is a rough translation from a local news network, Taichinh Vietnam’s report of the announcement:
“Therefore, to prevent other [similar] possible events in the immediate future, the Ministry of Finance proposed to apply suspension measures toward importing the mining equipment.”
Whopping Increase of the Imports of Mining Rigs in 2018
In the year of 2017, over 9,300 mining rigs were imported into Vietnam, according to the figures from Vietnam Customs. However, that number rose exponentially following the cryptocurrency boom in late-2017/early-2018 – as of April 2018, 6,300 crypto mining rigs have already been imported into the South East Asian nation.
Although back in mid-2017, the Vietnamese government suggested that they might legalize cryptocurrencies like Bitcoin. However, this decision was eventually rendered null and void when the central bank refused to consider Bitcoin as a recognized non-cash payment method, effectively prohibiting the use of cryptocurrencies in the process.
“According to the provisions of the law, Bitcoin and other virtual currencies are not lawful means of payment in Vietnam,” read a statement by the central bank of Vietnam. “The issuance, supply, use of bitcoin and other similar virtual currency as a means of payment is prohibited in Vietnam.”