Another cryptocurrency fraud? Vietnam investigates after over Rs 4300 crore losses reported

Vietnamese authorities are investigating an alleged cryptocurrency scam in which about 32,000 investors have been duped of $660 million.

A Ho Chi Minh City-based company, Modern Tech, which was allegedly behind two Ponzi schemes involving cryptocurrencies iFan and Pincoin is now the centre of the investigation. Many investors came out on streets at its office address to protest on Sunday, reported a local publication Tuoi Tre News.

Moneycontrol could not independently verify the quantum of the alleged fraud.

Modern Tech claimed to be the authorised representative to launch ICO (Initial Coin Offering) for two cryptocurrencies, Ifan and Pincoin, in Vietnam. The company has been accused of encouraging people to invest in these new cryptocurrencies.

Pincoin which is based in London and has a “mission to develop and promote blockchain technology and cryptocurrency in a rising global sharing economy to help people share assets, resources, time and skills more efficiently” claims to deliver up to 40 percent monthly profit, apparently without mentioning risks, to its investors — a hallmark of a Ponzi scheme.

Similarly, iFan aims to provide payment options for content creators and consumers. “The outstanding aspect of the iFan platform is the sharing of profits against celebrities, enabling them to generate revenue based on their content, images and information on social networks. Actors, idols, athletes, or celebrities all who act in present or even who have retired, they still manage and work to attract their fans,” it says in its whitepaper.

Both cryptocurrencies launched their ICOs in November-December last year. iFan had proposed to sell 10 million coins at varying prices from $1.6 to $6.8 per coin in its first crowdsale last year. On the other hand, Pincoin had a target to raise $150 million from its ICO.

Vietnamese authorities have started the clampdown on cryptocurrencies in the country. On April 4, Vietnamese PM released a directive on strengthening the management of Bitcoin-related activities and other similar virtual currency in the country.

Vietnam’s central bank has already declared that cryptocurrencies are not a lawful medium of payment in the country.