Authority warns of virtual currency trading fraud

Illustrative Image (Photo: internet)

Hanoi (VNA) – Vietnam 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 Vietnam, 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 Vietnam, 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 dong had unexpectedly disappeared and the victims were left stranded.

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.-VNA