Many countries have recognised the pitfalls of allowing cryptocurrency to thrive due to the growing number of fraudulent crypto and forex activities worldwide – and Vietnam is one such country. In fact, the authorities in the country recently announced that they were moving to ban the import of all technology and equipment used to mine cryptocurrencies
The news comes after regulators began scrutinising crypto-related businesses and activities in Vietnam following an ICO fraud that was instrumental in stealing approximately USD $660m from nearly 32,000 local investors.
After the ICO fraud, the Ministry of Finance proposed a ban on all crypto-related activities in Vietnam. During this time, the authorities became more vigilant, scrutinising crypto activities.
In July 2018, the country’s central bank, the State Bank of Vietnam, accepted the proposal made by the Ministry of Finance and supported the ban.
Once the ICO fraud came to the forefront of public consciousness, Prime Minister Nguyen Xuan Phuc ordered six ministry departments, including the central bank and law enforcement, to investigate the scam.
Now, Vietnam’s customs department has announced that all imports of cryptocurrency mining equipment will be banned.
The ban has been anticipated which explains why individuals and local businesses ceased crypto mining long before the official announcement.
It is believed that the Ministry of Trade, the Ministry of Finance and the Ministry of Justice supported the ban as it would help improve Vietnam’s ability to manage currency transactions.
Cryptocurrency mining received encouragement in 2017, after the Ho Chi Minh City Customs Department allowed nearly 7,000 Litecoin and Bitcoin miners. As a result, it appeared that Vietnam was poised to turn into a hub for crypto mining.
Officials stated at that time that the country had close to 3,664 Application-Specific Integrated Circuit (ASIC) devices. Statistics also revealed that nearly 3,000 of the mining devices were imported into the country by four businesses. The remaining machines were imported by individuals and small businesses.
Figures from the Ho Chi Minh City Customs Department reveal that there are 664 mining machines that were imported by businesses and individuals. However, these machines did not have import tax codes.
Most mining machines brought into the country were manufactured by Antminer, a mining equipment brand which is a subsidiary of Bitmain.
Experts believe that banning the import of crypto mining equipment is the final step in making crypto mining and cryptocurrency illegal. In fact, at the start of 2018, the Central Bank of Vietnam refused to recognise any payment made in cryptocurrency. It did not accept these payments as a legal tender.
The only approved and legal non-cash methods of payments in the country are cheques, bank cards and payment orders. Making or receiving payments in any cryptocurrency in Vietnam is illegal and any individual or business found dealing in cryptocurrency is liable for prosecution.
The law states that anyone caught taking or making payments in any cryptocurrency will face stiff penalties. Fines for infringing the law range from VND 150m to VND 200m. This is roughly equal to about USD $6,000 to $9,000.
Experts have warned that once the law banning the import of crypto mining equipment is passed in Vietnam, it would essentially make all cryptocurrencies completely illegal.