Vietnam Business Channel

Another Vietnamese cryptocurrency firm closes under the cloud of “fraud”

In the most recent case of cryptocurrency fraud, investors in “Sky Mining” a company that is registered in the Phu Nhuan District of Ho Chi Minh City appear to have lost more than $35 million USD as the company has closed its office and the president of the company has gone into hiding.

Police in Ho Chi Minh City have received more than a dozen complaints from investors who have complained that they are victims of fraud in the company’s cryptocurrency mining operations.  Investors in the company went to the company’s offices in Phu Nhuan district and found the building closed, the company nameplate and signs had been removed and that Le Minh Tam, Sky Mining’s CEO has disappeared.

Sky Mining claimed to specialize in purchasing computers and operating them to solve cryptocurrency mining algorithms.  It invited investors to buy a computer system that performs the necessary computations for cryptocurrency mining, and investors paid up to $5,000 for each cryptocurrency mining computer.   

Among the key points in the company’s sales pitches were the investors did not need a technical background since the mining machines would be kept at one of Sky Mining’s 26 storage locations across Vietnam.  The company promised investors that after 1 year they would earn back 100% of their initial investment and that on a long-term basis they would generate up to 300% profit and would own the mining machines.  Additionally, the company promised to pay commission to investors who invited additional people to invest in the company.

As investors in the company investigated the company after its office closed, they found that more than 600 mining machines in the company's factory in neighboring Dong Nai Province had been taken away by people claiming to be maintenance workers.  

Sky Mining is a new company that began operations in March 2018 and since that time, the company has acquired more than 7,000 computers designed fro cryptocurrency mining.  In order to develop its investor network, the company hosted events in Hanoi and Ho Chi Minh City and the company claimed that it was the “largest” cryptocurrency mining company in Vietnam.

Le Minh Hieu, the Deputy Chairman of Sky Mining said that after the office losing and the disappearance of Le Minh Tan that he has formed a temporary board of directors who will support investors and calculate the remaining asset of the company.

In a statement to local media, Hieu said that Tam has gone to the U.S., taking all the money from the company’s bank accounts. Hieu said he was not clear about the details of the company’s assets as Tam had directly managed the mining rigs and storage and that: 
“[The board] has reported this to the police and showed evidence that we are not guilty.” 

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A Sky Mining event in Ho Chi Minh City 

The Sky Mining fraud is similar to that of another Ho Chi Minh City company, Modern Tech that was stormed by investors demanding refunds in April.

Investors in Modern Tech said that the company had cheated them of $650 million USD with a cryptocurrency ponzi scheme that guaranteed investors would receive 48% interest per month, with a payback period of less than four months.  The $650 million USD loss was more than 150 times more than the company’s equity of $4.4 million that was raised from only eight people, who founded the company in October 2017.  Modern Tech’s management has not responded to the accusations about the company, and its founders are in hiding. 

Vietnam imported a total of 6,400 cryptocurrency mining systems in the first four months of the year, according to official data and officials are increasingly concerned about whether these machines should be outlawed since cryptocurrencies like Bitcoin are not recognized in the country.