The Ministry of Public Security arrested the director and chief accountant of the VGX Company for operating an llegal online gold and forex market.
Vu Duc Hieu, the director of the Hanoi-based company, and his chief accountant, Nguyen Thi My Hanh, are being investigated for operating an illegal business, a charge that carries jail terms of up to two years.
VGX was initially registered as an investment consultancy
Investigators found that VGX has offered the service to about 700 investors with total turnovers topping VND110 billion (US$5.17 million).
On Friday, police raided the company’s Hanoi headquarters and Ho Chi Minh City offices to collect further evidence.
According to investigators, VGX has supplied the illegal service since it was founded in 2012.
The service allowed its customers to trade gold in lots valued at up to $1 million each.
According to the company’s ad campaign, investors can trade gold and six foreign currencies by calling or meeting with staff. VGX staff offered to help them set up an account on the company’s website via Skype or Yahoo.
Investors were also invited to download company software with which to buy and sell gold and currencies for a per-transaction fee.
VGX also supplied a demo server for investors to get acquainted with the system.
After that, they could log on to a live server and deposit money into their account by transferring money to VGX’s accounts. VGX also transferred money to the accounts of investors who asked to withdraw money from the system.
According to investigators, there are still 30-40 similar illegal services in Vietnam with thousands of investors.
These deals are not managed by governmental agencies and the government cannot collect taxes on the transactions.
Because they are unregulated, government investigators maintain that their users run significant risk of losing their money.
Online gold trading has been banned since March 30, 2010 when the government tightened controls on the precious metal to discourage its widespread trade.