HCM CITY — HCM City authorities have urged police to investigate a cryptocurrency fraud case involving VNĐ15 trillion (US$666 million) and affecting 32,000 people.

Lê Thanh Liêm, standing vice chairman of the city People’s Committee, has sent an urgent letter to the city’s police, requesting investigation of the multi-level virtual currency scam related to Modern Tech Joint-Stock Company.

Speaking at a meeting held yesterday in the city, Liêm said that virtual currency was not legally recognised in Việt Nam.

“Anyone using Ifan and Pincoin for trading will be handled in accordance with the Vietnamese law,” he said.

On Sunday afternoon, dozens of people protested at the headquarters of Modern Tech in HCM City’s District 1, carrying banners with the phrase “biggest digital money fraud in history”.

According to local media, the owner of the office building said the company had moved out in early March.

“Modern Tech left and liquidated a contract about one month ago. No one knows where they are now,” said the office building owner, who declined to be named.  

Operators of two Initial Coin Offerings (ICOs) have gone silent after multiple reports revealed them as scams.

Ifan and Pincoin, cryptocurrency startups purportedly from Singapore and Dubai, respectively, were allegedly multi-level ponzi schemes under the control of the Việt Nam-based outfit Modern Tech.   

Modern Tech advertised the cryptocurrency iFan and Pincoin to potential investors, promising them huge monthly interest of at least 48 per cent in cash and four months as the maximum time for full payback, said the protesters at the office building.

Those who were able to invite others to buy digital currency were told they would have a commission of 8 per cent.

The only condition for the investors was that they buy at least $1,000 worth of digital money.

For many, the lucrative offer was too tempting to decline. More than 32,000 investors poured some VNĐ15 trillion into buying virtual money.

However, Modern Tech changed its policy following a global cryptocurrency crash late last year which caused iFan’s value to plummet to about 1 US cent per iFan.

The company is no longer paying interest and principal back to the investors in cash, but is using iFan currency instead.

Modern Tech set iFan’s value at $5, much higher than the market price, causing losses to customers.

Modern Tech said it was only an official representative of both coins in Việt Nam, before media reports confirmed that its seven Vietnamese executives were the masterminds behind the scheme.

The State Bank of Việt Nam (SBV) said it was closely following the alleged cryptocurrency fraud.

“The bank will co-operate with police to investigate the case,” said Nguyễn Hoàng Minh, SBV’s HCM City Branch deputy director. — VNS