Strategic Vietnam Crypto Regulation: A Bold Move to Exit FATF Gray List

Vietnam is making significant strides in the digital asset space. The country is strategically using **Vietnam crypto regulation** as a key tool to improve its standing on the global financial stage, specifically addressing concerns raised by the Financial Action Task Force (FATF). This effort aims to combat digital asset fraud, enhance its financial reputation, and position itself as a digital economy leader in Southeast Asia.

Addressing the FATF Gray List Status

In June 2023, Vietnam was placed on the **FATF gray list**, officially listed as a ‘jurisdiction under increased monitoring.’ This designation was due to identified deficiencies in its Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) measures. Issues included inadequate supervision of financial institutions, weak Customer Due Diligence (CDD), and insufficient regulation of virtual asset service providers. To be removed, Vietnam committed to an FATF action plan requiring strengthened AML laws, improved regulatory oversight, and effective prosecution of financial crimes.

By complying with FATF standards, Vietnam hopes to attract global venture capitalists and crypto exchanges, turning regulatory clarity into an economic development tool.

Vietnam’s New Digital Asset Framework

A pivotal development is Vietnam’s Law on Digital Technology Industry, approved on June 14, 2025, and effective January 1, 2026. This legislation is the world’s first standalone law dedicated to the digital technology industry. It introduces a clear legal framework for digital assets, including licensing requirements and compliance mechanisms aligned with international standards.

Key highlights of the Digital Technology Law include:

• **Ambitious Growth:** Aims for 150,000 digital tech firms by 2035.
• **Defined Categories:** Separates crypto assets (like Bitcoin, Ether) from virtual assets (non-financial digital items) for precise, risk-based regulation.
• **Incentives:** Offers tax breaks, grants, and import duty exemptions for tech firms and investors.
• **Workforce Support:** Provides tax exemptions for Vietnamese digital experts and easier visa/work permit rules for foreign experts.
• **AI and Digital Asset Regulation:** Establishes a risk-based AI framework and legal rules for crypto and virtual assets.
• **Regulatory Sandbox:** Allows controlled testing of blockchain, DeFi, and virtual asset technologies.

This new **digital asset law** facilitates structured regulation, enabling controlled use while distinguishing these assets from traditional finance. The government is tasked with licensing, oversight, and operational guidelines for each category.

Boosting AML CFT Crypto Compliance

The Law on Digital Technology Industry is a critical step towards aligning Vietnam’s digital asset sector with FATF standards on AML and Countering the Financing of Terrorism. It officially legalizes crypto, ending prior legal ambiguity and aligning with FATF’s call for clear national digital asset regulation.

Key measures for **AML CFT crypto** compliance include:

• **Legal Recognition:** Recognizes crypto ownership and use.
• **Defined Categories:** Allows for precise risk assessment and regulation based on asset type.
• **Integration:** Crypto exchanges and wallet providers fall under state supervision to address weak customer due diligence concerns.
• **Regulatory Clarity:** Formalizes the sector, making transaction monitoring and KYC easier.

The legislation empowers the government to define licensing rules, asset classification, and oversight mechanisms, ensuring crypto service providers and financial institutions operate within a regulated environment.

Combating Digital Asset Fraud

The new law provides authorities with a clear legal framework to investigate, prosecute, and deter digital asset fraud, addressing previous enforcement gaps. It mandates compliance obligations like identity checks, transaction monitoring, and reporting duties for crypto service providers.

Recent cases highlight the need for these reforms:

• In February 2025, authorities arrested individuals behind BitMiner, a fake mining scheme defrauding 200 victims of over 4 billion Vietnamese dong (~$157,300).
• In December 2024, Hanoi police disrupted a scam involving Million Smiles, which used deceptive ads for a cryptocurrency called QFS, resulting in losses of about $1.17 million.

The law also facilitates greater international cooperation on digital asset fraud investigations by aligning regulations with global standards. This is vital for addressing transnational crypto crimes.

Fostering Vietnam Blockchain Innovation

Beyond compliance, the law is part of Vietnam’s ambition to become a digital technology hub. By formally recognizing crypto assets and establishing a framework for **Vietnam blockchain** technology, the government aims to attract global startups and investors.

Incentives for tech companies include tax reductions, subsidized access to digital campuses, grants, and infrastructure support. The government is also investing in digital education to ensure a skilled workforce.

Conclusion

Vietnam’s new crypto regulation is central to its strategy for FATF compliance and improving its global image. By defining digital assets, enforcing licensing, AML/KYC, and transaction oversight rules, Vietnam addresses key FATF concerns. If fully implemented, these reforms could lead to removal from the FATF gray list, signaling renewed trust in its financial system. A clear regulatory environment also enhances investor confidence, attracting international crypto businesses and fostering innovation. This strategic approach benefits both financial integrity and economic growth.