Under a recent announcement in Official Letter No. 4486/UBCK-GSDC dated 20 July 2018, the State Securities Commission of Vietnam (SSC) requires public companies, securities companies, asset management companies, and securities investment funds (quỹ đầu tư chứng khoán) (i) not to conduct any illegal offering, transaction or transaction brokerage relating to virtual money (tiền ảo) which should include cryptocurrencies like Bitcoin and to (ii) adhere to the legal regulations on anti-money laundering.
The above official letter was based on Directive 10/CT-TTg of the Prime Minister dated 11 April 2018. Both of them once again confirm the view of Vietnamese government on virtual money that was stated by the State Bank of Vietnam in its press release dated 27 February 2014 about Bitcoin in Vietnam:
(a) virtual money is not currency; and
(b) virtual money is not a legal tender.
Although “tiền tệ” is not a defined term under the current laws of Vietnam, the first sentence might have meant that any virtual money (such as Bitcoin) is not the national or accepted currency of Vietnam, which is Vietnamese Dong (VND). Additionally, virtual money is also not a legal tender under the current regulation.
On the other hand, the press release also stated that the ownership, trade, and use of virtual money as an asset is risky and not protected by the laws. This is because,
(a) under the current definition of “asset” (tài sản) under Article 105 of the Civil Code 2015, virtual currencies cannot be identified as assets;
(b) the requirements for the validity of a civil transaction are provided in Article 117 of the Civil Code 2015, in which no regulations requiring the object being traded to be an asset are found; and
(c) since it is not considered as an asset, the transaction is not protected by the laws (e.g. cannot sue scammer for fraud (lừa đảo chiếm đoạt tài sản))
Virtual currency is also not a recognized type of securities under Article 6.1 of the Law on Securities 2006. Therefore, initial coin offering (ICO) does not subject to the regulation on initial public offering (IPO) of the securities laws.
Nonetheless, there is a good reason to be cautious about virtual currency, especially cryptocurrency, at least at the moment. Essentially all of the cryptocurrencies do not have intrinsic value (thus, they are unstable), they are hard to trace (which can be used for money laundering) and can be manipulated (by a majority control of the hashing-power).
This post is contributed by Le Thanh Nhat, a trainee at Venture North Law Limited.