With the present amount of investment in Bitcoin and its significant presence on virtual currency exchanges, is it illegal to purchase, trade, or use it?
Currently, in the current legal documents of Vietnamese law, there is no specific regulation on what Bitcoin is.
In reality, Bitcoin is a type of virtual currency. Virtual currency refers to a digital currency that is not regulated and is typically created and controlled by developers. It is used as a form of payment among members of a virtual community who accept it.
This is a currency that can only be used in a certain community or organization. The legal value of the virtual currency (Bitcoin) is not recognized under current Vietnamese legislation.
Blockchain technology is the foundation of Bitcoin. Blockchain will offer a record of all network transactions but will keep the identity of those who make the transactions private.
A number of articles of Decree No. 101/2012/ND-CP have been amended and supplemented in accordance with the terms of Clause 1, Article 1 of Decree 80/2016/ND-CP, the following non-cash payment methods are permitted under Vietnamese legislation in payment transactions: Cheques, payment orders, collection orders, bank cards, and other payment instruments as prescribed by the State Bank.
Thereby, based on the aforementioned regulation, Bitcoin does not belong in the non-cash payment methods approved. As a result, it is illegal to use virtual currency, such as bitcoin, to conduct financial transactions in Vietnam.
However, there are no specific legal provisions in the Vietnamese legal system that address Bitcoin trading activity. According to Decision No. 27/2018/QD-TTg, the bitcoin industry is neither currently included in Vietnam’s system of economic sectors, nor is it included among the business areas in which foreign investment is restricted under the Investment Law 2020.
As a result, it is understandable that Vietnamese legislation does not explicitly allow the trading of bitcoin, but there is also no specific regulation prohibiting these activities.
The consequences of using Bitcoin for transactions
According to Decree 88/2019/ND-CP at point d, Clause 6, Article 26, as amended and supplemented by Decree 143/2021/ND-CP, using Bitcoin to conduct financial transactions would result in the following penalties:
- Acts of issuing, supplying, and using illegal means of payment that are not yet subject to criminal prosecution will be subject to a fine of between VND 50 million and VND 100 million.
- In addition, any individual or organization that opens a payment account for a customer, or allows a customer to use a payment account in contravention of the law in the process of providing payment services will also be fined from 50 million VND to 100 million VND.
If there are clear signs that someone is using Bitcoin for payment in transactions, they could be prosecuted for criminal liability in accordance with Article 206 of the 2015 Criminal Code No. 100/2015/QH13, as amended and supplemented in Clause 48, Article 1 of the Law amending the Criminal Code 2017, specifically as follows:
A fine of between VND 50 million and VND 300 million or imprisonment from 06 months to 03 years:
This case applies when someone commits an act that causes property damage to others from VND 100 million to under VND 300 million, acts including:
- In case of not being granted credit but granting credit (except for the case of granting in the form of credit card issuance).
- Granting unsecured credit or granting credit with preferential conditions to subjects who are restricted from granting credit as prescribed by law.
- Violating regulations on safety ratios for operations of credit institutions, and foreign bank branches as prescribed by the Law on Credit Institutions.
- For the purpose of granting credit to the case where a security asset is required and the act intentionally inflates the value of the security asset.
- For subjects restricted from credit extension, they commit acts of violating the law on total outstanding loans.
- Granting credit beyond the limit compared to owning capital to a customer and related person (except for cases with the approval of a competent person as prescribed by law).
- Violation of the law on capital contribution, capital contribution limit, share purchase, and credit granting conditions.
- Illegally issuing, supplying, or using payment means.
- Acts of forging payment vouchers and illegal payment mean.
- Illegal gold trading or illegal foreign exchange business.
- Carrying out banking activities without the permission of a competent state agency according to the provisions of the Law on the State Bank of Vietnam and the Law on Credit Institutions.
Imprisonment from 03 to 07 years:
- If any subject commits a crime the consequences cause property damage from 300 million VND to less than 1 billion VND.
- Subjects commit crimes with consequences causing property damage from 1 billion VND to less than 3 billion VND.
Imprisonment from 12 to 20 years:
Subjects commit crimes with the consequences of causing property damage of 3 billion VND or more. During a period of one to five years, the violators are also prohibited from holding certain positions, engaging in certain professions, or working in specific occupations.
Therefore, in accordance with the aforementioned laws, using Bitcoin will result in criminal liability if it comes under the category of illegal use of a payment method or illegal issuance or supply of a payment method if the consequences exceed 100 million VND.