Currently, many cryptocurrency exchanges are marketing and promoting virtual asset services without proper authorization, leading many people to fall into traps.
Many people still expect to make big profits from cryptocurrency exchanges.
Unauthorized operation
Mr. Phan Duc Trung, Permanent Vice President of the Vietnam Blockchain Association, said that many reports from consumers sent to the Association show that they have been scammed through sending and depositing money to trading platforms and e-wallets with unclear information and not yet verified by regulatory authorities.
Many virtual asset service providers (VASPs) operating without licenses in Vietnam are currently showing signs of violating the law, typically by secretly collecting personal data illegally and using users' personal data for improper purposes.
According to Mr. Trung, in Vietnam today, there are many entities operating in the virtual asset sector with unclear information, such as CrossFi, Mineplex, ALEO, etc., organizing secret seminars and exploiting his image and that of the Blockchain Association to build credibility and raise money from participants. For example, CrossFi organized seminars with thousands of attendees and raised up to 3 trillion VND in Vietnam.
Furthermore, many cryptocurrency exchanges such as Binance, Mexc, BingX, Gate.io, etc., are engaging in widespread and unauthorized marketing and promotion of virtual asset services. In addition, some exchanges, when users are scammed and contact the Blockchain Association for assistance, fail to cooperate in resolving the issue.
A typical case involves a user in Vietnam who was scammed out of 100,000 USDT (a cryptocurrency representing USD). Although the user received a police report acknowledging receipt of the scam and submitted it to the MEXC exchange, the exchange did not cooperate in resolving the issue. Meanwhile, the exchange required the user to sign a Non-Disclosure Agreement (NDA) before further assistance could be provided. To date, this user has not recovered their assets.
The second case involved a user and the cryptocurrency exchange Gate.io. A user in Vietnam was scammed out of 800,000 USDT. The ChainTracer transaction tracing project of the Blockchain Association found evidence of funds flowing to Gate.io; however, representatives of the exchange refused to cooperate. This exchange had also been warned by the State Securities Commission in the past.
Mr. Do Ngoc Quynh, Secretary General of the Vietnam Bond Market, emphasized: Virtual assets and related activities are a social reality that has existed on a large scale in Vietnam and globally. Virtual assets can also be considered one of many innovative applications of advanced technology in the development of society, aimed at better meeting human needs.
"The strong response and participation from users shows that this innovation has, to some extent, effectively met the needs of societal development. Innovative ideas often precede the development of the legal framework and always bring both positive and negative impacts to society. Therefore, the formation of a legal framework is necessary to protect users," Mr. Quynh shared.
A suitable legal framework is needed.
Experts argue that banning transactions or prohibiting the operation of virtual asset service providers (VASPs) is not feasible. Instead, a legal framework consistent with anti-money laundering standards should be quickly enacted.
According to a representative of the Vietnam Blockchain Association, taxing digital assets should be done like paying lottery winnings, because investing in cryptocurrencies is like buying a lottery ticket; the winnings are simply luck.
In addition, developing ethical standards, community standards, project standards, and applying RegTech (Regulatory Compliance Technology) on-chain tracking can contribute to minimizing fraud and scams related to virtual assets.
Experts also believe that to promote the Fourth Industrial Revolution in Vietnam, the law must play a role in promoting and protecting property rights over the new types of assets created by this revolution. However, these are very new and complex issues, so comprehensive solutions cannot be proposed immediately. Therefore, a possible approach is to closely monitor the development of technology and the market while strengthening exchanges, learning from international experience, and consulting with relevant stakeholders (businesses, consumers, etc.) to develop appropriate policy solutions.
Cryptocurrency assets are a new issue, not only for Vietnam but also for developed countries, which currently lack a comprehensive legal framework to regulate them. Countries mainly approach this from a risk-management perspective, applying experimental legal frameworks (sandboxes) to both encourage and promote innovation while mitigating risks.
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