The continuous rise and fall of gold prices, coupled with a sluggish stock market, has prompted many to shift their funds to international gold and foreign exchange markets.
During a recent parliamentary questioning session, the Governor of the State Bank of Vietnam (SBV) affirmed that the SBV has not licensed any gold trading or foreign exchange (forex) trading platform.
However, in reality, clandestine gold and foreign exchange trading platforms continue to operate quietly day and night, even as official investment channels like stocks and real estate are quite sluggish, while gold's liquidity remains very low.
Transferring money from stocks and virtual gold
On November 15th, the domestic stock market plummeted for the second consecutive session. The VN-Index dropped more than 13 points, falling close to the 1,200-point mark, with many stocks experiencing price drops of 5%-10% in just a few short days. Meanwhile, the sharp drop in gold prices from nearly 90 million VND/ounce to 80 million VND/ounce left many feeling disheartened.
Conversely, online groups and forums dedicated to gold and forex trading on social media platforms like Zalo and Telegram are quite active as gold and USD prices fluctuate sharply in the international market. Some investors, disillusioned with the stock market, have started depositing money into unofficial forex platforms to "play" the gold and foreign exchange market.
"I just deposited more money, please help me make money with Thanh (the Fexsi broker who is guiding an investment group with over 100 members), stock investing is so sluggish, I'm so discouraged," - a person named Ngoc messaged in the Gold and Forex Investment group on Zalo and received many likes from members.
Statements of gold trading orders from accounts on forex investment groups. Photo: LAM GIANG
According to an investigation by a reporter from Nguoi Lao Dong Newspaper, Ms. Ngoc (residing in Ho Chi Minh City) is one of approximately 20 new members who joined this investment advisory group, led by a person named Thanh. This person guides new investors on how to register an account on the Fexsi exchange, convert VND to USD, and execute trades.
According to Thanh, Fexi is a reputable forex platform from the UK that has been operating for many years, with all transactions complying with international regulations. Thanh also claimed that forex platforms in Vietnam are not yet licensed, so there will be risks, but they are very low (!?). "For those with small capital, I will guide them in investing to increase their capital and then charge a 10% fee on the profits earned," Thanh said.
A distinctive feature of international forex platforms is their 24/7 trading, meaning investors can buy and sell at any time. According to brokers, the attractive aspect of forex investment is that regardless of whether the price of gold rises or falls, investors can profit from Buy or Sell orders, at any time.
Ms. Nga (residing in Ho Chi Minh City), an investor who has been trading gold on a trading account for about a month, said that although she has experienced losses a few times, her overall trades have been winning, so she is "very confident" and "very happy." Ms. Nga is also one of those who switched from investing in stocks to forex.
Notably, during the discussions, many investors were aware that forex platforms in Vietnam are not licensed, and international platforms are located far away with unknown addresses, yet no one seemed worried or afraid of collapse, fraud, or losing money because "they are international platforms, they are reputable, how could they collapse!".
According to our reporter's observations, not only are there groups advising on gold investment on Zalo and Telegram, but also many online forums dedicated to gold and forex investment with tens of thousands of members. Every day, dozens of posts are exchanged and commented on the fluctuations in gold and foreign exchange prices. Many people post complaints and denunciations about losing billions of dong due to losses from participating in forex trading platforms, but almost no one seems worried.
When the world gold price peaked at $2,790/ounce at the end of October, many predicted that the price could reach $3,000/ounce, leading many investors to place buy orders. However, in reality, the price of gold continuously plummeted and is currently only around $2,567/ounce, causing many investors to suffer losses.
"I lost quite a lot on my Buy order thinking the price would go up to around $2,700/ounce. Now I'm broke. 70 million VND, then 190 million VND. The more money I put in, the more I lose," said a sad investor named Giang.
Nevertheless, on forums and groups, there are still many investment offers to help people recover their losses, such as "Anyone stuck with losing trades, deeply in debt, join the support group to recover your losses," but the actual effectiveness has not been verified by anyone. The Nguoi Lao Dong newspaper has also received several complaints from investors who poured billions of dong into domestic forex trading platforms, only to find themselves unable to claim their rights when the platform collapsed.
Too much risk
Speaking with reporters, economist Dr. Dinh The Hien said that when people talk about forex, they usually think of the foreign exchange market with various currencies and the gold market. However, forex is not in the conventional investment segment because it has more of a gambling nature.
"Investment channels that have a gambling aspect are usually only for a select few knowledgeable investors and are more focused on winning or losing. Gold and foreign exchange derivative markets, for example, involve risks many people are aware of, and are not protected by law, but because of the high profits, they still participate blindly."
"Gold and foreign exchange prices fluctuate on this market every minute, every hour, so investors can win or lose everything in an instant. Especially when problems occur with these international exchanges, investors will not be protected," Dr. Hien analyzed.
Meanwhile, financial expert Phan Dung Khanh stated that not only international forex trading platforms attract Vietnamese investors, but also counterfeit or foreign-branded forex platforms lure investors in. When problems arise, such as the platform collapsing or investors suffering losses, it becomes very difficult to claim their rights because these platforms are not registered businesses, lack specific addresses, and primarily conduct transactions online.
"The forex market inherently carries much higher risks than the stock market due to leverage ratios of up to 1:100. While the success rate for investors on official international forex platforms is already low, the risks are even higher on fraudulent and deceptive platforms domestically. When problems arise, investors lose money, and regulatory agencies find it difficult to handle because they don't know where the servers are located or how the transaction funds flow," analyzed Mr. Phan Dung Khanh.
Some financial experts warn that with fraudulent forex platforms, the perpetrators often actively place buy and sell orders, even manipulating them to initially allow investors to win small amounts of money. Once investors deposit significantly larger sums, they will "trap" them, causing them to lose everything.
Governor of the State Bank of Vietnam, Nguyen Thi Hong, affirmed that according to current regulations on foreign exchange management in Vietnam, only credit institutions are licensed to conduct foreign exchange business, especially in the international market.
When businesses and individuals need foreign currency, they can only transact with credit institutions. No other organizations or individuals have been licensed by the State Bank of Vietnam (SBV) to conduct foreign exchange business. In particular, the SBV has not licensed any forex trading platforms to operate in Vietnam. If people trade on such platforms, the risk of fraud is very high. To control risks for the public, relevant agencies must strengthen efforts to detect organizations and individuals establishing illegal trading platforms.
Source: https://nld.com.vn/san-forex-van-nhon-nhip-keo-khach-196241115204039947.htm
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