The cryptocurrency investment trend is surging, attracting many but also bringing significant risks. With the allure of potential profits comes the stark reality of losses, as illustrated by a recent case involving a notorious scam led by TikTok influencer Mr Pips, also known as Phó Đức Nam. At the end of 2024, authorities uncovered a massive cryptocurrency scam operation that has left nearly 3,000 victims devastated, resulting in assets worth over 5,200 billion VND being seized.
The deception began earlier in July 2024 when thousands fell prey to the investment scheme on the speeding.vip platform, which lured users with promises that ultimately turned out to be false. This fraudulent scheme employed a reverse pyramid multi-level marketing model, using funds from later investors to pay returns to earlier ones, leading to massive financial risks and losses.
In August 2024, the situation escalated as thousands in Bắc Giang province were affected after getting involved with the DigiByte cryptocurrency application. Unfortunately, users found themselves locked out of their investments as the app became inaccessible, leading to significant financial losses for many, including several individuals who lost billions of VND.
As scams in the cryptocurrency space continue to evolve, experts warn that criminals are increasingly exploiting the lack of understanding among the general public regarding digital currencies. Authorities have voiced numerous alerts regarding these risks, emphasizing that investing for profit in such environments can lead to devastating financial consequences.
One psychological factor contributing to the growing number of victims is FOMO, or the Fear of Missing Out. This mindset drives individuals to rush into cryptocurrency investments—mirroring the decisions of others without fully understanding the market dynamics. Such behavior can expose them to fraudulent projects, often backed by false promises of climbing values and high returns.
Unscrupulous actors often create artificial price spikes to entice new investors, ensuring that those at the top of the scheme can cash out before the value collapses, leaving the newcomers to shoulder the losses. This increasingly sophisticated tactic leverages social media to spread enticing narratives that lure in unsuspecting investors.
Despite the Vietnamese government’s efforts to implement legal frameworks surrounding cryptocurrency transactions, many individuals remain unaware of the inherent risks. Recently, the government announced intentions to explore cryptocurrency exchange platforms, aiming to legitimize and regulate the industry. However, the path forward is fraught with challenges.
Financial experts stress that it is essential for individuals to arm themselves with knowledge before entering the cryptocurrency market. Official sources of information, especially from reputable financial media, serve as critical resources that potential investors must heed. Notably, experts indicate that if an investment opportunity promises returns exceeding 10% to 12%, serious caution should be exercised, since these figures commonly signal fraudulent schemes targeting unsuspecting investors.
Older individuals with savings often find themselves in the sights of these fraudsters, as their lack of familiarity with digital currencies makes them prime targets. Heightening public awareness of the nature of cryptocurrencies is vital, particularly since, unlike state-backed currencies, digital currencies carry no guarantees, making investors vulnerable amid fluctuating prices and potential legal issues.
Globally, as of now, 119 countries have legalized some form of cryptocurrency, with 62 enacting comprehensive regulations. Conversely, 22 nations have outright banned the use of cryptocurrency, reflecting a divided global approach to digital currencies.
In Vietnam, the local market is still largely unregulated, with no international securities firms operating within its borders. While the cryptocurrency sector continues aggressive growth, the prospect of scams and fraudulent schemes remains unsettlingly high.
Investors must remain vigilant and informed, maintaining a cautious approach to protect their assets from falling into the hands of fraudsters. Ultimately, staying educated and making thoughtful decisions will be paramount for anyone looking to delve into the alluring yet perilous world of cryptocurrency investment.
