Recently Vietnam made headlines in the cryptocurrency world for the wrong reasons. It was home to two ICO scams (if you could even call it that, considering that it had all the hallmarks on traditional investment scams) that purportedly defrauded 32,000 locals of a whopping US$660mil. That figure is mind boggling and would make it not only the biggest ICO investment scam the world over but a record figure even in the context of traditional investment scams in this part of the world.
However, there is no official confirmation that the figure is accurate.
Many believe that the figure is an exaggerated one. One seasoned Vietnam-based crypto player quipped that it could be a case of one or two additional zeros being tallied into the calculation, “considering that the local Dong currency has many zeros”. (USD$1mil equals to 22.8bil Vietnamese Dong).
An investment banker in HCMC reckons that the tally of US$660mil could have included the promised returns, which is a typically high and un-achievable return rate that are seen in all Ponzi schemes.
Two important facts need to be known. One is that this incident is not new. Reports highlighted that such schemes were operating a few years ago. The latest incident is a build up of that. And secondly, the iFan and Pincoin scams are not going to be last in vietnam. There are similar scheme still going on, say insiders.
These schemes have the typical hallmark of unrealistic financial returns and the MLM/pyramid-based incentive of bonuses for bringing more people into the game. A writer in the Saigon Timesaptly described the saga as one driven by greed and foolishness as any scheme that promises you monthly returns as high as 48% must be a scam.
Whatever the case, public outcries and street protests got the government’s attention.
Government officials, which have already taken a cautious stance on cryptocurrencies, have since done this:
- urged government and financial bodies to toughen the management of activities related to Bitcoin and other cryptocurrencies
- ordered the State Bank of Vietnam to crack down on all crypto-related financial services
- urged the Ministry of Justice to complete a legal framework for the management of virtual currencies and assets.
The question now is, will this incident hamper the development of blockchain in Vietnam?
This is still hard to tell. Nevertheless, the most amazing thing about Vietnam is that it is home to some of the most interesting, if not promising blockchain characters in the region.
Consider a set up called Infinity Blockchain Labs (IBL), that has more than 200 blockchain developers, researchers and marketers. Founded by Junya Yamamoto an IT entrepreneur from Japan and funded by angel investors, IBL does research into various blockchain technologies, looks into regtech, works with local universities and aspires to make Vietnam a blockchain R&D hub.
In its recent Vietnam blockchain landscape, IBL said based on its survey of key players in the country, the majority of those surveyed have a keen interest in exploring the potential of blockchain.
IBL has been involved in nurturing a regtech start-up called BlockPass which offers a digital self-sovereign identity, aimed at ensuring KYC and AML compliance for regulated service providers. BlockPass is believed to have began a private sale of its token in London, at the sidelines of the recent Blockchain Expo in London.
Yet another ambitious start-up is called Wise Pass, a lifestyle app running on an online to offline model and hoping to win the race for Southeast Asia domination before taking on the rest of the world. The 2 year old start-up has been VC backed and has now embraced blockchain technology and is launching its ICO out of Singapore.
Vietnam is also the home base for the regionally popular peer to peer exchange Remitano. Cryptocurrency mining is another big enterprise in Vietnam. Over 7,000 mining rigs were brought into the country last year alone.
Vietnam also stands out for a large number of developers with basic skills very eager to ramp up their coding skills; has some level of government support in the nurturing of start-ups such as the Vietnam Silicon Valley project by the Ministry of Science and Technology and four bitcoin ATM machines can be found in HCMC, used mainly by foreign tourists. Around 2000 people mostly locals attended the Vietnam Blockchain Week event in HCMC in early March.
In short, despite the hoopla surrounding the bad investment scams and the tough regulatory stance taken by the government, Vietnam is forging ahead with its blockchain drive.
Nicole Nguyen, a well known figure in the Vietnam blockchain scene and head of corporate marketing at Infinity Blockchain Labs, tells CNA: “Unofficially to date we have been able to list up around 40 blockchain startups either based or registered in Vietnam. Around one fifth have launched their ICOs from outside of Vietnam.”
Nguyen adds, “The awareness of blockchain technology is increasing exponentially thanks to increasing ecosystem players including startups, training institutions, existing businesses and events and conferences. The Vietnamese government endorses 4.0 technology and blockchain has been identified as one of the emerging technologies that are spearheading digitisation and innovation in the economy.”
Here’s our take on some of Vietnam’s notable names in the scene:
Considered a pioneer in the blockchain scene in Vietnam. The soft spoken native of Frankfurt, Germany, co-founded Bitcoin Saigon which still has its weekly meet-ups. Said to be a friend of Roger Wer and other early adopters of bitcoin, Dominik was part of the team that organised Vietnam’s first blockchain event in 2016 that included big names from the country’s central bank, local fintechs and big blockchain names such as Ver, Tone Vays and Simon Dixon, names that are headliners today in conferences across the globe. Weil today is involved in the running of Vietnam’s first exchange (Bitcoin Vietnam), a brokerage, a fintech remittance service and even bitcoin ATMs.
The 27-year-old Vietnamese PhD graduate in computer science from the National University of Singapore (NUS) founded Kyber Network had raised a whopping 200,000 Ether in its public crowdsale in Singapore last September. A regular invited speaker at Bitcoin and Ethereum workshops, Luu’s Kyber Network is also notable for having Vitalik Buterin as one of its advisors. Kyber Network is a decentralized exchange that aims to facilitate instantaneous exchange of cryptotokens without reliance on a traditional centralised exchange.
A PHD Candidate who founded Tomochain as an solution to the scalability problem with the Ethereum blockchain. Reportedly completed its ICO in early March and now has a client from the healthcare sector.
Japanese entrepreneur who had earlier established businesses that were listed on the Japan stock exchange and since 2012 had been been active in establishing IT venture funds. Set up Infinity Blockchain Labs in Ho Chi Minh in September 2015, backed by Japanese angel investors.
French born Lam is an ex-Google employee who has focussed on digital marketing most of his working life. Started lifestyle platform Wisepass two years ago and succeeded in securing venture funding in 2017 led by Singapore based Expara Ventures. Has discovered how blockchain can power his start-up which aims to connect its members with consumer related service providers across Asia.