This article was first published here
Though at one point in time Vietnam seemed to hold great promise for bitcoin and blockchain technology, a recent crackdown on all things crypto has left the industry in limbo.
Vietnam is by no means an exception in this regard as many countries are struggling with the task of creating a viable legal framework for the industry.
While regulators in different sectors have issued different rules and regulations, the general outlook on the sector is negative. And this is making it difficult for the sector to take root and grow and leaving investors seemingly lost.
In most countries, the need to regulate the crypto sector arises from the responsibility to protect investors against inherent dangers associated with the space. But what has become particularly challenging is finding a balance between regulations and allowing the industry to thrive.
Unclear Framework
The main problem in Vietnam is the lack of a unified approach in trying to achieve this. At the moment, the only clear decree is the central bank statement that digital currencies are not a legal means of payment in the country.
One of the notable incidents that have led to a negative perception of the sector by authorities was a lawsuit that tax authorities lost to a local bitcoin trader.
In September last year, a man who had amassed a crypto fortune won a case against the tax man. The court ruled that since bitcoin was not an asset under local law, the authority had no right to tax his fortune.
A more recent case involved a scam in which a bitcoin mining firm, Sky Mining disappeared with at least $35 million in investor money. Sky Mining director Le Minh Tam has reportedly fled the country and is currently in the US.
Blockchain projects in the country are currently trying to find loopholes in the ambiguous regulatory framework so as to continue operations.