Vietnam Accelerates Crypto Regulation to Combat Money Laundering

Facing the rapid growth and potential risks of crypto assets in terms of money laundering and terrorism financing, the Vietnamese government has requested the Ministry of Finance to study and develop a legal framework to ban or regulate this type of asset by May 2025. This is one of the contents of the National Action Plan on Anti-Money Laundering and Combating the Financing of Weapons, issued by the government recently.

Accordingly, the State Bank of Vietnam is also assigned the task of assessing the money laundering risks in casino, gaming, and crypto asset businesses; and completing this task by September 2024. At the same time, the relevant ministries and agencies must also come up with specific plans for the areas with high money laundering risks, such as the use of cash, gold in the economy to buy and sell real estate, corruption.

Currently, Vietnam does not have a specific definition of virtual currency and crypto asset. The current regulations only refer to the concept of electronic money pegged to legal tender, existing in the form of prepaid bank cards, e-wallets. Types of digital currencies such as Bitcoin, Ethereum… are considered as popular crypto assets. However, the regulator has repeatedly affirmed that virtual currency is not a currency, legal means of payment in Vietnam. The Anti-Money Laundering Law (amended) passed at the end of 2022 also did not legalize the types of virtual currency, crypto asset.

However, the reality of buying and selling, exchanging crypto assets in Vietnam is currently carried out through international exchanges or direct agreements, posing many risks of money laundering, personal involvement. Therefore, two years ago, the National Assembly requested the government to soon have a legal corridor for this new type of asset.

According to the data of the Vietnam Blockchain Association (VBA) in September 2023, the value of virtual currency Vietnam received nearly 91 billion USD in a year (from 10/2021 to 10/2022). Of which, illegal activities were 956 million USD.

Some countries have started to tighten regulations on virtual currency, protect users on the network. For example, last year, the European Union (EU) passed the Crypto Asset Market Regulation (MiCA) to prevent financial crimes using high technology, blockchain. The US, South Korea also issued many regulations to increase transparency, legal compliance in anti-money laundering, terrorism financing with digital currency, crypto asset.

The goal of the National Action Plan is to soon remove Vietnam from the enhanced monitoring list (gray list) of the Financial Action Task Force on Money Laundering (FATF) before May 2025. This is the list of countries that need to be closely monitored by FATF, including 20 countries, such as UAE, Syria, Panama, Cayman Islands… on anti-money laundering, terrorism financing.

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