Vietnam has seen its once-thriving cryptocurrency industry go into decline following the recent market-wide decline in digital assets. According to reports, the recent market decline has forced users to sell their assets, with many retail traders now in the red.
Vietnam has approached digital assets cautiously in recent years, allowing the development of blockchain technology in a gray area, unlike neighboring China, which opted for an outright ban in 2021. While digital assets are prohibited from being used as a medium of exchange in Vietnam, the government allows citizens to speculate in assets without restrictions. The move puts young people at the forefront of cryptocurrency adoption, with an estimated 17 million people holding digital assets.
What happened to Vietnam’s cryptocurrency industry?
Over the past few months, Vietnam has been making strides in the cryptocurrency industry. In January, the country announced that it had begun accepting applications from companies seeking to operate domestically licensed cryptocurrency exchanges. Under the licensing framework, applicants must have a minimum contributed charter capital of VND10 trillion ($400 million), among other requirements. This licensing program was introduced based on a law passed by Vietnam’s National Assembly in June 2025.
But what looked like a boom in the crypto industry has now turned into a liability, as investors are currently in the midst of a crypto winter. Bitcoin’s price has nearly halved since hitting a new record high of more than $126,000 in October, and other digital assets have fallen further. In an interview conducted by AFP news agency, Hanoi university student Hong Le claimed that he had lost all his digital assets. He claimed that his holdings rose to $200,000 but plummeted due to the decline in Bitcoin and other digital assets.
Mr. Tran Xuan Tien, Chairman of Ho Chi Minh City Blockchain Association, spoke about the current market situation and said that many businesses have closed down as a result of the crisis. He added that other companies are also downsizing as most of them are looking for funding to extend their runways. His words were echoed by Nguyen The Binh, co-founder of blockchain company Ninety-Eight, who said his company has laid off about a third of its employees since last year.
Industry players want plans to support the sector
Regarding the future, Bin added that the company is expected to carry out further restructuring in the future as the outlook for the industry is bleak. “We need a back-up plan because the market is likely to remain tough for years, not months.” Until recently, Vietnam’s cryptocurrency sector was a cautious one, with ventures dealing in highly speculative assets and Ponzi schemes thriving alongside companies offering legitimate products.
At the time, the Vietnamese government warned about the dangers of cryptocurrencies and went after the perpetrators of several large-scale frauds, particularly those that defrauded investors of more than $400 million. The country is currently pursuing growth reforms under leader To Lam to embrace the blockchain industry and assert control over the $100 billion market. The law recognizing digital assets went into effect last month, but investors have questioned its implementation.
Bin said that due to the industry’s ongoing decline and an uncertain legal framework, most companies have shut down, downsized or moved elsewhere. He also added that startups are struggling to gain traction as investors are choosing to wait until the market turmoil subsides. Previously, investors were seduced by the promise of 400% returns, but now they are disappointed to hear that they could lose everything.