Vietnam is the latest in the growing list of countries to be hit by ICO scams. As Asia Times reported earlier in April, Ho Chi Minh City authorities began investigating an alleged US$660 million ICO fraud after protesters gathered outside the office of local company Modern Tech on April 8, which served as the official Vietnamese representative for two crypto start-ups, Singapore’s iFan and Dubai’s Pincoin.
Media reports had placed the number of affected investors at close to 32,000. The investors became suspicious when, despite supposedly showing profits, commissions were made in tokens and not cash, and no actual withdrawals were possible.
Ifan had been promoted on an advanced social network for celebrities and music artists, while Pincoin was sold simply as an investment opportunity‚ promising up to 40% monthly returns.
Professor Augustine Vihn, a former economic adviser to the World Bank and a close follower of blockchain and crypto-currency developments in Vietnam, feels investor sentiment will not be dampened by the recent scandal.
“The investment community are very hungry, they want some opportunities… and quick money. Some of them they have a long-term view, but most of them are after some return on their investment. And they like programs promising a quick return, 35 to 50% interest per month,” he says.
Vihn says the government is stuck between two stools, of wanting to encourage technology and investment, and making sure investors don’t get burned. “The government are worried because crypto-currencies are new to them, with people bypassing the central and commercial banks; but at the moment they can’t really do anything about it because they are behind technology. So they are trying to catch up. But that doesn’t mean they are going to stifle the investment zeal of the public,” says Vihn.
“Blockchain is something new, and maybe it really will end up replacing a lot, so the government has to find a way to foster it. But also they must stop the illegal activities. They need to look at the good, the bad and the ugly,” Vihn adds.
The academic projects a strong investment community in Vietnam, that could number 30 million in five to 10 years. He says there will also be government backing and regulatory measures in place.
“The prime minster is very keen on technology, but the government doesn’t want crypto-currency to destroy the financial market or destroy public confidence in the banking system. So they will have to do something,” Vinh concludes.
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