Establishing a domestic cryptocurrency exchange to prevent money laundering

The cryptocurrency market faces opportunities and challenges

Mr. Phan Duc Trung - Chairman of the Vietnam Blockchain and Digital Assets Association - said that the cryptocurrency market in Vietnam is being strongly affected by macroeconomic fluctuations, causing investors to worry about the transparency and safety of exchanges.

Mr. Trung believes that developing the digital asset market is not only an opportunity but also a major challenge for management agencies, businesses and investors. However, if a suitable framework is built, this will be an important driving force to promote economic growth, while strengthening market confidence and the country's development orientation.

The formation of domestic cryptocurrency exchanges and the development of management mechanisms will help the market operate more transparently, instead of cash flow and transactions mainly taking place on foreign platforms as in the past.

Colonel Hoang Ngoc Bach - Head of Department 4, Department of Cyber Security and High-Tech Crime Prevention, Ministry of Public Security - said that in the past time, many fake exchanges, fraudulent models, calling for investment and then appropriating assets have appeared. Due to the high anonymity of cyberspace, the search and handling of these subjects face many obstacles.

Colonel Hoang Ngoc Bach noted that, with the construction of domestic exchanges, it is necessary to calculate solutions for managing and protecting citizen data from the beginning, avoiding repeating loopholes that have occurred. Previously, when people participated in foreign exchanges, they had to provide citizen identification cards, phone numbers, emails, and even bank account information. All this data is stored abroad, posing potential risks of being exploited and traded illegally.

Many sophisticated scams originate from criminals grasping personal data. Even, subjects can use leaked images and information to fake papers, open online accounts, and perform electronic authentication procedures to serve criminal acts.

Leaders of the Department of Cyber Security and High-Tech Crime Prevention proposed that licensed organizations must invest in strong enough technology systems to prevent cyber attacks, ensure information security at a high level, be regularly evaluated and coordinate with functional agencies in remote monitoring.

In addition, organizations need to have a mechanism to verify the source of investment money. Currently, there are no clear regulations on determining the legality of money flowing into the cryptocurrency market. This is a gap that needs to be filled to prevent money laundering.

Mr. Bach emphasized that there should be strict sanctions against illegal activities. When there is an official channel, illegal transactions need to be handled.

System completion before licensing

Mr. To Tran Hoa - Standing Deputy Head of the Market Management Board for cryptocurrency trading, State Securities Commission - said that receiving and appraising dossiers is only the starting step in the licensing process for this new type of market.

According to Mr. Hoa, after submitting applications, businesses should not wait but should proactively review and complete their entire internal process. In particular, businesses must invest and build an information technology system that meets level 4 security and safety standards according to regulations. This is not only a legal requirement but also a fundamental condition for the market to operate stably.

Mr. Hoa said that this is a new market, so management agencies approach it in a cautious and gradual direction. In the initial stage, only investors with available encrypted assets on international exchanges are allowed to trade on the Vietnamese exchange.