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The Great Crypto Con: Why Regulation of Digital Asset Exchanges is Urgent in the Wake of Billion-Dollar Scams

9 August, 2025

In other words, cryptocurrency trading in Vietnam is not prohibited, but there are also no regulations in place to protect investors. This has inadvertently made cryptocurrencies a fertile ground for scammers, with Ponzi schemes amounting to tens of thousands of billions of VND.

From cryptocurrency scams worth thousands of billions of VND

In 2018, public opinion was shocked by a large-scale scam called iFan and Pincoin – two cryptocurrency projects promoted by Modern Tech JSC. In October 2017, the individuals behind Modern Tech lured investors to participate in these projects with a promised profit of up to 48%/month and a commitment to return capital within just 4 months. Hiding under the guise of a high-tech investment project and a glamorous facade with their headquarters located in a luxurious building in the center of District 1, Ho Chi Minh City (now Ben Nghe ward), the project attracted tens of thousands of investors and a huge amount of money.

However, the nature of Modern Tech’s investment was a Ponzi scheme – using new investors’ funds to pay existing investors. To stimulate the network’s exponential growth, they offered an 8% commission to those who could attract new participants – a characteristic feature of a pyramid scheme. They also organized grandiose events, illegally exploited the images of celebrities to promote their project, and took advantage of the public’s trust.

Numerous investors protested at Modern Tech’s headquarters, demanding their money back.

And, just like other Ponzi schemes, Modern Tech quickly collapsed. On April 8, 2018, many people came to the company’s headquarters with banners and placards, accusing the company of fraud and appropriating their assets, but Modern Tech had already ceased operations, and there were no employees to be found. The subsequent investigation revealed that about 32,000 people fell victim to this company, with a total loss of 15,000 billion VND.

While iFan showcased the audacity of the scammers, the Matrix Chain (MTC) cryptocurrency scam demonstrated their evolving sophistication. This case was discovered by investigative authorities in early 2024, and by May 19, 2025, five suspects involved in the scheme had been arrested in Dong Nai. It was confirmed that this network had defrauded more than 138,000 accounts, amounting to over 10,000 billion VND, indicating an enhanced level of organization and operational scale.

The MTC project was one of the large-scale cryptocurrency scams in recent years.

Instead of merely promising huge profits, the group behind MTC created a more complex technological ecosystem. They hired anonymous programmers to work through Telegram – a hard-to-trace messaging application – to develop the MTC project. The MTC tokens were announced as the project’s official tokens, serving cryptocurrency transactions, online lending, and money transfers.

Investors would contribute capital through a “Vote” mechanism. Each vote cost 31 USD, and two votes were allowed per day. Due to the daily vote limit, some individuals created dozens or even hundreds of accounts to invest. The scammers claimed that this was not a Ponzi scheme, arguing that the money from votes would go into a bonus fund, from which profits would be distributed. The investor community spread the news about a “bottomless bonus fund,” and the number of participants grew rapidly due to attractive commissions and faith in the “potential and super-high profits” propagated by the fraudsters.

However, these tokens had no actual value and could only be used by those already invested in the project. To lure victims, this syndicate organized promotional events, built a multi-level marketing system, and divided the territory into three regions from North to South. More subtly, they operated the project on the SafePal digital wallet and the B2B Smart Trade platform, which are genuine technological platforms, causing even experienced individuals to fall into the trap.

Why are cryptocurrency scams so prevalent?

Westerners often say, “There’s no such thing as a free lunch,” implying that nothing in life is truly free, and seemingly generous offers are often traps. Cryptocurrency scams operate by exploiting human greed and offering absurdly high profits.

However, it’s essential to empathize with the victims because scammers don’t operate so simply. They always hide behind glamorous facades, organize extravagant events, misuse celebrities’ names, make promises, and manipulate psychology in a systematic way to build trust and lure victims into their traps.

The scammers use cunning tactics to lure their victims. Illustrated.

Additionally, an undeniable fact is that in 2024, Vietnam was among the leading countries in terms of cryptocurrency usage, with approximately 17 million people owning digital wallets, representing 17% of the population, according to Triple-A. Furthermore, according to Chainalysis’ report “Global Crypto Adoption Index 2024,” Vietnam ranked 5th globally in cryptocurrency ownership, following India, Nigeria, Indonesia, and the United States.

Looking back at the time when these incidents occurred, Vietnam had not yet recognized cryptocurrencies. For instance, Decree 52/2024/ND-CP defined “electronic money” as the value of VND stored on electronic media, but cryptocurrencies like Bitcoin were not recognized as a legitimate means of payment. Crypto-assets were also not legally recognized as assets, creating a legal gray area for a market worth billions of USD.

The lack of recognition meant that there were no cryptocurrency exchanges based in Vietnam, forcing investors to turn to foreign exchanges. A large and unregulated market provided opportunities for scammers to carry out their schemes, resulting in Ponzi schemes worth thousands of billions of VND.

Illustrated.

The need for a robust legal framework for cryptocurrency exchanges

On June 14, 2025, the National Assembly passed the Law on Digital Industry, which will take effect on January 1, 2026. This is the first law in Vietnam to comprehensively regulate the digital technology industry, with the most important aspect being the official recognition and definition of digital assets, ending the legal ambiguities that have persisted for many years.

Notably, the government has also planned to pilot a centralized cryptocurrency exchange. According to Deputy Minister of Finance Nguyen Duc Chi, the exchange will be organized by units and enterprises licensed by the State. This move will enable the government to protect the rights and legitimate interests of organizations and individuals participating in the cryptocurrency market.

This approach is considered appropriate by experts, allowing the government to observe, evaluate, and adjust regulations flexibly, bringing unregulated transactions under the supervision of management agencies. Licensed exchanges will be required to implement procedures such as KYC verification, anti-money laundering measures, and meet cybersecurity standards, thereby reducing scams and minimizing investor risks.

Additionally, with the recognition of cryptocurrencies as assets and the establishment of exchanges, a clear tax regime is also necessary. Similar to the stock market, profits from cryptocurrency transactions should be taxed. According to Chainalysis, the value of cryptocurrency transactions in Vietnam in 2024 reached 105 billion USD. Assuming a tax rate of 0.1% similar to the stock market, the state budget could be supplemented by more than 1 billion USD (approximately 26 trillion VND) annually.

Chau An

– 11:30 18/07/2025