Authority warns of e-currency fraud

Friday, Sep 16, 2016 09:00

Viet Nam Competition Authority (VCA) has warned of fraud related to the trading of virtual currency and raising funds through a multi-level practice. — Photo
HA NOI (Biz Hub) — Viet Nam Competition Authority (VCA) has warned of fraud related to the trading of virtual currency and raising funds through a multi-level practice.

This has led to serious damage and stirred discontent in the public.

VCA said that this type of multi-level trading had high risks, since it was easy to appropriate money from the participants.

VCA said multi-level trading of any services was illegal according to the Law on Competition. Before investing money in a company, citizens must study the firm carefully and should stay away if it conducts multi-level trading of services, the authority said.

Bitcoin multi-level trading has made an appearance in Viet Nam, in which investors spend a certain amount of money to participate and buy bitcoins. They are then required to seek new investors to earn commissions, according to VCA. Bitcoin transactions are conducted online with the server located abroad.

VCA said that it was difficult to withdraw "real" money out of this type of trading system (or the withdrawals were limited to a modest amount).

Risks exist as the operators could easily appropriate money from investors without any commitments or erase data of the investors, leaving behind no basis for claims.

In addition, virtual currency is not a legitimate form of payment in Viet Nam, thus, in case of disputes, investors had no legal ground for their rights to be protected.

Several cases of bitcoin trading frauds were reported recently, in which dozens of billions of dong had unexpectedly disappeared and the victims were left stranded.

The Voice of Viet Nam recently reported that several residents in the Central Highlands province of Gia Lai participated in bitcoin trading through the website, which was introduced as a global bitcoin trading network with multi-level operations. These people were misled by the promised high commission of up to 144 per cent per month. operated smoothly for the first two months with no late payments of commissions. In late June, however, the site was shut down, and in August, the operator disappeared with billions of dong.

The national radio broadcaster quoted Nguyen Huy Hoang, deputy head of An Khe Town Police's Department of Economic Crime Investigation, saying that the location of the server could not be determined.

Initial findings revealed that there were some 1,900 accounts on and around VND22 billion (US$986,500) was appropriated.

The VCA also warned about the multi-level money raising operation, with abnormally high commissions, which was said to be invested in property, hospitality or mining projects, but in fact was just a cover. Once the pyramid collapsed, it would be difficult for participants to take back their money.

"Residents should keep their eyes open," VCA said. —  VNS

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