Vietnam Is Outraged Over a $658 Million Cryptocurrency Scam

The Vietnamese government has weighed in on a $ 658 million alleged cryptocurrency scam in the country, with Deputy Prime Minister Vuong Dinh Hue urging six ministries to “quickly consider and tackle” the issue.

The scam apparently entailed fraudulent initial coin offerings (ICO) by a company in Ho Chi Minh City. According to a Bloomberg report, Prime Minister Nguyen Xuan Phuc also reiterated the illegality of Vietnamese financial institutions going anywhere near cryptocurrencies.

ICOs are a form of fundraising in which “investors” pay for new virtual coins issued by a company, which will supposedly be useful at some point. In the U.S., the Securities and Exchange Commission (SEC) is busily trying to crack down on scammy ICOs, although it is adamant that not all of the offerings are fraudulent. China has banned ICOs outright.

As for the Vietnamese case, news outlet Tuoi Tre News reported earlier this week that the offices of the company behind the two allegedly fraudulent ICOs, Modern Tech, were besieged by angry investors. However, the building’s owners said Modern Tech had liquidated and cleared out its office a month ago.

According to that report, Modern Tech claimed to be the authorized Vietnamese representative for the launches of the iFan and Pincoin platforms. It claimed iFan was a Singaporean project and Pincoin a Dubai-based scheme; in fact, Modern Tech itself was behind them.

The websites for both schemes are still live. Pincoin claims to be a cryptocurrency for the “sharing economy.” Meanwhile, iFan is supposedly the “most advanced social network”—an Ethereum-based platform for celebrities and their communities of fans, using a token called ERC20.

Both are apparently classic pyramid schemes, with new investors’ money going to pay off older investors. All investors were promised huge returns—”profit up to 40% monthly,” Pincoin’s investors were told. However, while investors could see the value of their token rise within the platforms’ systems, Tuoi Tre News reported that they were unable to withdraw their profits in cash.

In total, 32,000 people reportedly fell victim to the scheme, shelling out 15 trillion Vietnamese dong ($ 658 million .)