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VietNamNews

State Bank to crack down on bitcoin exchange

Update: July, 12/2014 - 10:26
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HA NOI (VNS) — The State Bank of Viet Nam will work with the public security forces to seize operators of the Viet Nam real-time bitcoin exchange (VBTC) that was launched on Wednesday.

Head of the SBV Payment Department Bui Quang Tien told the local press that his department, which is supposed to manage electronic money, did not grant any licence to the exchange.

"Bitcoin and other virtual currencies are not legal tender or permitted means of payment in Viet Nam," Tien added.

VBTC was jointly founded by the Bitcoin Viet Nam Co. Ltd and the Israeli Bitcoin Exchange Bit2C earlier this year and launched beta testing in June. It allows unlimited bitcoin purchases in Viet Nam.

VBTC CEO Nguyen Tran Bao Phuong, quoted by thesaigontimes.vn, said that the company was discussing with the concerned authorities about the benefits of bitcoins. She said that the benefits that "this advance in monetary technology" would bring about were irrefutable, albeit the Government has to work harder to manage it.

Phuong said that she was ready to cooperate with the Government to prevent bitcoin-related crimes.

"If the Government does not accept bitcoins, formulating a law banning them would be very difficult," Phuong said.

Many countries such as Thailand, Russia, France, China and Norway do not recognise bitcoins as legal currency.

An official statement, dated February 27, by the SBV said that the use of bitcoins was illegal. The document says: "All bitcoin exchanges that allow users to trade anonymously, therefore, can be used to launder dirty money, sell drugs, hide from paying taxes, exchange and pay for illegal activities."

Services hosting bitcoins have been shown to be at high risk of being hacked, stolen, or have their database exchanges and exchanges stopped.

At the beginning of 2014, the value of the bitcoin fell significantly when two of the biggest bitcoin exchanges in the world, Mt. Gox and BitStamp, temporarily disallowed customers from withdrawing their money due to technical difficulties.

The US government also arrested four suspects for illegal activities connected to bitcoins. On February 25, Mt. Gox closed down suddenly and hundreds of millions of dollars worth of bitcoins were stolen.

Due to its fluctuating nature and the complications that can occur within a short time, the bitcoin is, therefore, seen as a bubble and is unpredictable and dangerous for investors.

It is not regulated by any institution or country worldwide. Therefore, bitcoin users have no legal protection and have to bear the losses arising from its volatility themselves.

Thus, the central bank has warned organisations and individuals not to invest in bitcoins, keep any bitcoins, use services connected to them and other cryptocurrencies. — VNS

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