Authority warns of multi-level virtual currency trading fraud

September, 15/2016 - 16:25

Việt Nam Competition Authority (VCA) has warned of fraud related to the trading of virtual currency and raising funds through a multi-level practice.

HÀ NỘI — Việt Nam Competition Authority (VCA) has warned of fraud related to the trading of virtual currency and raising funds through a multi-level practice.

This has led to serious damage and stirred discontent in the public.

VCA said that this type of multi-level trading had high risks, since it was easy to appropriate money from the participants.

VCA said multi-level trading of any services was illegal according to the Law on Competition. Before participating in any multi-level trading, citizens must study the enterprises carefully and should stay away if the companies conduct multi-level trading of services, the authority said.

Bitcoin multi-level trading has made an appearance in Việt Nam, in which investors spend a certain amount of money to participate and buy bitcoins. They are then required to seek new investors to earn commissions, according to VCA. Bitcoin transactions are conducted online with the server located abroad.

VCA said that it was difficult to withdraw “real” money out of this type of trading system (or the withdrawals were limited to a modest amount).

Risks existed as the operators could easily appropriate money from investors without any commitments or erase data of the investors, leaving behind no basis for claims.

In addition, virtual currency is not a legitimate form of payment in Việt Nam, thus, in case of disputes, investors had no legal ground for their rights to be protected.

Several cases of bitcoin trading frauds were reported recently, in which dozens of billions of đồng had unexpectedly disappeared and the victims were left stranded.

The Voice of Việt Nam recently reported that several residents in Central Highlands’ Gia Lai Province participated in bitcoin trading through the website, which was introduced as a global bitcoin trading network with multi-level operations. These people were misled by the high commission of up to 144 per cent promised per month. operated smoothly for the first two months with no late payments of commissions. In late June, however, the site was shut down, and in August, the operator disappeared with billions of đồng.

The newspaper quoted Nguyễn Huy Hoàng, deputy head of An Khê Town Police’s Department of Economic Crime Investigation, saying that the location of the server could not be determined.

Initial findings revealt that there were some 1,900 accounts on and around VNĐ22 billion was appropriated.

The VCA also warned about the multi-level money raising operation, with abnormally high commissions, which was said to be invested in property, hospitality or mining projects, but in fact was just a cover. One the pyramid collapsed, it would be difficult for participants to take back their money.

“Residents should keep their eyes open,” VCA said. - VNS