Vietnam regulates crypto market: who needs to be careful now!

Vietnam regulates crypto market: who needs to be careful now!

The Ministry of Finance in Vietnam has submitted a draft regulation to amend administrative sanctions in the field of securities and securities markets. This draft is seen as a significant step towards regulating the emerging crypto asset market in the country. The draft defines five specific behaviors that are considered manipulation of the crypto asset market, including using one's own or third-party trading accounts to create artificial supply and demand and spreading false information.

Another key point is the establishment of fines for trading on insider information, which range from 1.5 to 2 billion VND (approximately 63,000 to 84,000 euros). Providers of crypto services can also be excluded from the market for up to five months. These measures aim to maintain the integrity of the crypto market in Vietnam and protect investors.

Legal framework for crypto assets

In addition to the regulation, the government has tasked the Ministry of Finance with developing a comprehensive legal framework to regulate or ban crypto assets by May 2025. This instruction is part of a national action plan to combat money laundering, terrorist financing and the financing of weapons of mass destruction, launched by Government Decision 194/QĐ-TTg on February 23, 2024. Vietnamese authorities have repeatedly emphasized that cryptocurrencies are not legal tender and are only accepted in certain communities, such as the gaming community.

As part of this legal framework, the information provided to supervisory authorities about the risks of crypto assets should also be improved. The regulatory decision aims to prevent money laundering in the banking system. It should be noted that the Anti-Money Laundering Law, passed at the end of 2022, does not contain any specific regulations for cryptocurrencies.

Market development and challenges

Bitcoin remains the most valuable cryptocurrency. However, Vietnam authorities are very cautious about regulating crypto assets and have a nuanced view compared to other countries that consider cryptocurrencies as taxable assets. The State Bank of Vietnam declared in 2022 that cryptocurrencies are not issued by central banks. The regulatory measures are part of a broader strategy to implement international standards in the area of ​​financial supervision.

A crucial aspect of the regulatory framework is investor responsibility. Investors who fail to open an account and transfer their crypto assets within the prescribed period can face fines ranging from 100 to 200 million VND (approximately 4,200 to 8,400 euros). These various measures and regulations show that Vietnam is committed to creating clear guidelines when dealing with cryptocurrencies and crypto assets.

Through the combination of sanctions and a legal framework that is scheduled to be finalized by 2025, Vietnam aims to minimize risks for investors and stabilize the country's financial ecosystem. Developments in this area are of great interest to both local and international investors.

For more information, read coverage from vietnam.vn as well as from vietnamnews.vn.