What is digital asset custody and why is it in demand? Metaco explains

What is digital asset custody and why is it in demand? Metaco explains.Source: Shutterstock

Vietnamese investors lost $658 million to alleged cryptocurrency scam

OVER 32,000 people reportedly fell victim a cryptocurrency scheme in Vietnam, incurring losses of some VND15 trillion (US$658 million) in what is said to be the country’s largest Initial Coin Offering fraud.

A report by Tuoi Tre News earlier this week said angry investors had besieged the offices of Modern Tech, the company behind the two allegedly fraudulent ICOs, but owners of the building had cleared out from the office last month.

The report said Modern Tech, who told investors that it was the authorized Vietnamese representative for the launches of the iFan and Pincoin platforms. Modern Tech also claimed it was behind the Singapore-based iFan and Pincoin, scheme from Dubai.

Both are apparently classic pyramid schemes, with new investors’ money going to pay off older investors, according to Fortune.

Pincoin’s investors were promised handsome returns of up to 40 monthly and the platforms’ systems allowed them to view the rising value of their tokens. However, they were unable to trade their tokens for cash.

On Wednesday, the government urged greater vigilance against cryptocurrency transactions and investments, as officials in its economic hub asked police to investigate the case

In a directive, Prime Minister Nguyen Xuan Phuc told the State Bank of Vietnam, the Ministry of Public Securities and other bodies to tighten the “management of activities related to bitcoin and other cryptocurrency”, the government said.

“Cryptocurrency investment and trading and raising money through initial coin offerings are evolving in a more complicated manner,” it said in a statement on its website, as quoted by Reuters.

These developments threaten to affect the stability of the financial system, social order and safety and posed great risks to corporate and individual participants, it added.

The statement followed a report by the official Vietnam News Agency that authorities in Ho Chi Minh City had asked police to investigate accusations that a company, Modern Tech JSC, raised money from token sales of Ifan and Pincoin cryptocurrency.

The mobile telephone of the firm’s general director, Ho Xuan Van, was turned off on Wednesday.

“All cryptocurrencies and transactions in cryptocurrencies are illegal in Vietnam,” said Le Dong Phong, the police chief of Ho Chin Minh City.

“We are gathering information about the case, but officially we haven’t launched an investigation until we receive accusations from any of the alleged victims,” Phong told Reuters. He declined to provide further information.

According to a copy of the directive seen by Reuters, the prime minister told the State Bank of Vietnam to instruct banks not to provide any payment services related to illegal cryptocurrency transactions.

He told the Ministry of Public Security to investigate detect and prevent illegal activities related to money laundering and terrorist financing through cryptocurrency.

He also told the Ministry of Justice to complete the legal framework for managing and dealing with virtual assets.