$658 Million Cryptocurrency Fraud Allegation Spurs Vietnam Probe

(Bloomberg) -- Vietnam’s deputy prime minister ordered an investigation into allegations of a cryptocurrency scam involving $658 million, the latest report of fraud to hit the lightly regulated market for initial coin offerings.

Deputy Prime Minister Vuong Dinh Hue told six ministries to “quickly consider and tackle” the scam, according to a statement on the government’s website that didn’t name the coins involved. A separate statement from Vietnam’s prime minister on Wednesday called for the nation’s financial companies to avoid handling cryptocurrency transactions, which authorities have previously said are illegal.

While ICOs have allowed some legitimate blockchain-related ventures to raise funds quickly by selling tokens to investors, the offerings have also been plagued by reports of wrongdoing. Governments around the world are increasingly scrutinizing the market, with U.S. Securities and Exchange Commission Chairman Jay Clayton saying on Tuesday that he was surprised by the levels of fraud that surround ICOs.

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