Key Takeaways:
- The Department of Cybersecurity and High-Tech Crime Prevention in Vietnam has initiated an investigation into operations of the Pi cryptocurrency.
- The Pi Network was launched in 2019 and unlike some other cryptocurrencies, Pi does not require massive computational power to mine.
- In 2018, the State Bank of Vietnam banned commercial banks and payment service providers from making transactions involving cryptocurrencies.
In a move that has sent ripples through the global cryptocurrency community, the Department of Cybersecurity and High-Tech Crime Prevention in Vietnam has initiated an investigation into operations of the Pi cryptocurrency. The announcement has stirred up a significant amount of attention, given the growing popularity of this digital currency in the Southeast Asian nation.
“The operations of cryptocurrency models like Pi have been exceedingly complex and unmanaged recently,” said department head Le Xuan Minh, during a meeting held in Hanoi to discuss the matter. His statement underscores concerns that authorities have over potential risks associated with unregulated cryptocurrency activities, especially those promising high profit margins.
Vietnamese authorities have been consistent in their warning against investing in cryptocurrency models that offer abnormally high returns or those that employ multi-level marketing schemes.
Pi Network and Its Popularity in Vietnam
The Pi Network was launched in 2019 and unlike some other cryptocurrencies, Pi does not require massive computational power to mine. Instead, it uses an individual’s smartphone to validate transactions and secure the network, making it accessible to a broader audience.
The Pi Network experienced a surge in popularity in Vietnam in 2021. Accessibility of the model and the potential for high returns attracted a significant number of Vietnamese citizens, leading to a boom in the number of Pi users in the country. This boom, however, also raised concerns among authorities about potential risks and complexities associated with unregulated cryptocurrency activities.
These concerns escalated due to the fact that cryptocurrencies are not considered legal tender in Vietnam. Vietnamese laws stipulate that issuing, trading, or using cryptocurrencies for payment can result in a fine of up to VND 100 million (approximately US $4,240).
The Investigation: A Step Towards Greater Regulation?
The State Bank of Vietnam has declared that the issuance, supply and use of digital currencies is illegal as a means of payment. Credit: Wikipedia
An investigation launched by the Vietnam Department of Cybersecurity and High-Tech Crime Prevention into the Pi cryptocurrency could be seen as a step towards greater regulation of cryptocurrencies in the country. By looking into operations of the Pi Network, Vietnamese authorities are signaling their intent to get a better handle on the potential risks.
It is worth noting that this is not the first time Vietnamese authorities have taken steps towards regulating cryptocurrencies. In 2018, the State Bank of Vietnam banned commercial banks and payment service providers from making transactions involving cryptocurrencies, citing concerns over their potential use in illegal activities.In light of the recent investigation, it will be interesting to see how Vietnamese authorities approach the regulation of cryptocurrencies going forward. While they have shown a certain level of skepticism towards digital currencies, they have also demonstrated a willingness to adapt to changes in the global financial landscape.
