All forex trading activities in Vietnam are illegal, here’s why
The authorities have not issued license for any forex trading floor, so all foreign exchange (forex) trading activities in Vietnam are illegal.
Illegal cryptocurrency exchanges turn investors into debtors, according to the Hanoi Times.
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Promises of sky-high profit with short payback period are tricks that never get old in luring people into illegal cryptocurrency exchanges. At the end, all these investors have left are huge debts on their shoulders.
The recent collapse of the Coolcat investment platform with the assurance of complete safety was a case in point. Before joining the platform, investors are presented with six insurance investment packages, ranging from VND1.3 million (US$56.5) to VND210 million (US$9,100). The most expensive package would yield a maximum return of VND9.7 million (US$422) per day.
Those participating in this platform would have to guess whether the prices of gold, foreign or cryptocurrencies would go up or down in a day. If they lose six times in a row, a Coolcat expert would help them make the seventh guess and the chance of winning is up to 90%. And even if these experts could not make it right, Coolcat would reimburse 100% the money investors lost in the previous six guesses.
However, until the day that Coolcat platform vanished, not a single investor get their money back fully, as nearly 2,000 people said they have been cheated millions of US dollars.
Investors from BussTrade, a blockchain-based trading platform and operates in the form of binary options, also face the same fate. The platform’s promises 100% of investors’ capital is insured and a profit of up to 30% per month.
According to the site, BussTrade has a team of experts to place orders, and investors just have to follow their lead and collect money, even as they have little to no financial knowledge.
Tran Tung, an individual investor at Hoang Mai, Hanoi, said at first, he invested VND2.4 million (US$105) into the platform and gained profit of 5-7% per week.
Seeing such high profit, Tung then borrowed money from family and friends to raise his investment capital in BussTrade to over US$20,000.
“Before the site vanishes, I still have a total of US$42,540 in my account, but now it has all gone,” he said.
Greed leads to tragedy
Economist Dinh The Hien said there have been similar frauds as Coolcat or BussTrade in the past, but “greed has clouded investors’ judgment as more and more are emerged as victims of these platforms.”
“The majority of people joining these illegal cryptocurrency exchanges want to make quick profit, which makes them easy prey for swindlers.”
“As these swindlers know their action is illegal, they would disappear right after gaining enough money and leave investors empty handed,” Hien said.
The scammers’ job has been helped by growing number of famous people from the showbiz promoting and joining digital- and cryptocurrencies.
Director of DG Investment Fund Nguyen Duy Phuong said despite the high risk of these illegal cryptocurrency exchanges, the number of people joining these platforms has been on the rise, along with higher amount of money lost.
“The consequences for them and the society are severe, but more platforms continue to pop up like mushrooms after rain,” Phuong warned.
Under current legislation, only the Ho Chi Minh City Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) are authorized to run stock transactions markets in Vietnam.
“Cryptocurrency is not a type of stock, while there are no laws covering the issuance and trading of these currencies and virtual assets,” said Phuong.
Lawyer Truong Thanh Duc, director of ANVI law firm, said all foreign exchange (forex) trading activities in Vietnam are illegal as the authorities have not issued license for any forex trading floor.
In the past few days, Hanoi police has made multiple arrests of those operating four illegal trading floors of Rforex.com, Yaibroker, Vistaforex and Exswiss.
The local authorities estimated as of early 2021, Vietnam has around 240 illegal trading floors of gold and foreign currencies, attracting tens of thousands of people involving in transactions of up to trillions of Vietnamese dong (VND) or billions of US dollars, according to the Hanoi Times.
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