Yet another cryptocurrency fraud of over $658 million surfaced which led the Vietnamese authorities to clampdown the cryptocurrencies in the country.
A directive signed by Prime Minister Nguyen Xuan Phuc on Wednesday called for new rules to "strengthen the management of activities related to cryptocurrencies".
Vietnam’s deputy prime minister ordered an investigation into allegations of a cryptocurrency scam in which about 32,000 investors have been duped of $660 million, the latest report of fraud to hit the lightly regulated market for initial coin offerings. A Ho Chi Minh City-based company, Modern Tech, which was allegedly behind two Ponzi schemes involving cryptocurrencies iFan and Pincoin is now the centre of the investigation. Many investors came out on streets at its office to protest on Sunday, reported a local publication Tuoi Tre News.
Modern Tech claimed to be the authorised representative to launch ICO (Initial Coin Offering) for two cryptocurrencies, iFan and Pincoin, in Vietnam. The company has been accused of encouraging people to invest in these new cryptocurrencies.
While ICOs have allowed some legitimate blockchain-related ventures to raise funds quickly by selling tokens to investors, the offerings have also been plagued by reports of wrongdoing. Governments around the world are increasingly scrutinizing the market, with U.S. Securities and Exchange Commission Chairman Jay Clayton saying on Tuesday that he was surprised by the levels of fraud that surround ICOs.