Vietnam's Crypto Law 2025: A Strategic Path to FATF Compliance

Introduction

Vietnam has taken a decisive step toward crypto regulation with the passage of the Law on Digital Technology Industry in June 2025. This groundbreaking legislation, effective January 1, 2026, represents Vietnam's comprehensive strategy to address Financial Action Task Force concerns and exit the gray list through robust digital asset oversight.

The new law establishes clear regulatory frameworks for cryptocurrency operations while strengthening anti-money laundering and counter-terrorism financing measures. Vietnam's approach demonstrates how emerging economies can leverage crypto regulation to enhance their international financial standing.

Understanding the FATF and Vietnam's Gray List Status

What is the FATF

The Financial Action Task Force, established in 1989 by the G7 nations, sets global standards for combating money laundering, terrorist financing, and other financial crimes. The organization creates policies and monitors compliance through peer reviews and assessments.

Countries failing to meet FATF standards face placement on gray lists or blacklists, severely impacting their global financial reputation and investment attractiveness. FATF compliance requires robust legal frameworks, effective supervision, and strong enforcement mechanisms.

Vietnam's FATF Challenges

Vietnam joined the FATF gray list in June 2023 due to significant deficiencies in its anti-money laundering and counter-terrorism financing measures. The FATF identified several critical issues including inadequate supervision of financial institutions, weak customer due diligence procedures, and insufficient regulation of virtual asset service providers.

The gray listing also highlighted concerns about Vietnam's efforts to combat illicit financing related to weapons proliferation. To achieve removal from the gray list, Vietnam must fully implement a comprehensive FATF action plan addressing these systemic weaknesses.

Vietnam's Digital Technology Industry Law: Key Provisions

Comprehensive Digital Asset Framework

Vietnam became the world's first country to enact standalone legislation dedicated to the digital technology industry. The law aims to create 150,000 digital technology firms by 2035 under the "Make in Vietnam" initiative.

The legislation provides clear definitions for digital assets, distinguishing between crypto assets like Bitcoin and Ethereum, and virtual assets representing non-financial digital items. This classification enables precise risk-based regulation aligned with FATF guidance.

Business Incentives and Support

The law offers substantial incentives for technology companies, including tax breaks, grants, and import duty exemptions for startups, SMEs, and foreign tech investors. Vietnamese digital experts receive five years of tax exemption, while foreign experts get five-year visas without work permit requirements.

A regulatory sandbox allows controlled testing of blockchain, DeFi, and virtual asset technologies to foster innovation while maintaining oversight. These provisions create an attractive environment for crypto businesses and international investors.

How Vietnam's Crypto Law Addresses FATF Concerns

Legal Recognition and Classification

The law officially legalizes cryptocurrency ownership and use, ending legal ambiguity that previously hindered enforcement efforts. By separating crypto assets from virtual assets, Vietnam enables more precise risk-based regulation per FATF guidance.

Crypto exchanges and wallet providers fall under state supervision, helping Vietnam address FATF concerns about weak customer due diligence and illicit finance monitoring. The law excludes securities, CBDCs, and traditional financial instruments from these categories.

AML and CFT Integration

The legislation introduces comprehensive compliance obligations including identity checks, transaction monitoring, and reporting duties. These measures directly support Vietnam's goal of exiting the FATF gray list by establishing a transparent, controlled crypto environment.

Vietnamese authorities now have clear legal frameworks to investigate, prosecute, and deter digital asset fraud. The law facilitates greater cooperation with international regulators through aligned crypto regulations and cross-border investigation capabilities.

Combating Digital Asset Fraud

Enhanced Enforcement Capabilities

Vietnam's new crypto law provides authorities with robust tools to combat digital asset fraud. Previously, the absence of legal frameworks hampered enforcement efforts and allowed fraudulent schemes to operate with impunity.

Recent fraud cases highlight the urgency of these reforms. In February 2025, authorities arrested four individuals behind BitMiner, a fake crypto mining scheme that defrauded 200 victims of over 4 billion Vietnamese dong. In December 2024, Hanoi police disrupted a scam involving Million Smiles, which used deceptive advertisements to promote a cryptocurrency called QFS.

International Cooperation

The law enables Vietnam to collaborate with foreign authorities on cross-border investigations by aligning its crypto regulations with global standards. This capability is particularly important for addressing transnational crypto crimes where assets and suspects often cross jurisdictions.

By addressing legal gaps and enhancing regulatory coordination, Vietnam has strengthened both its national enforcement efforts and its reputation in the global financial community.

Digital Innovation and Economic Development

Technology Hub Ambitions

Vietnam's crypto law supports its ambition to become a digital technology hub in Southeast Asia. The government welcomes innovation and attracts global startups and investors through formal recognition of crypto assets.

The law offers significant incentives for tech companies, including tax reductions for blockchain, AI, and chip design firms. Subsidized access to digital campuses and innovation parks, along with grants and infrastructure support for R&D in semiconductors and cloud technology, create a comprehensive ecosystem for digital innovation.

Workforce Development

The government invests in digital education through vocational programs, university-industry collaboration, and tech apprenticeships. These initiatives ensure a skilled workforce capable of supporting Vietnam's digital transformation goals.

Combined efforts aim to establish Vietnam as a regional leader in digital innovation while maintaining regulatory compliance and financial integrity.

Future FATF Review and Global Image

Compliance Strategy

Vietnam's cryptocurrency law is central to its FATF compliance strategy. By defining virtual and crypto assets and enforcing rules on licensing, AML/KYC, cybersecurity, and transaction oversight, the country aligns itself with FATF Recommendation 15.

The State Bank of Vietnam has tightened AML rules, updated risk assessments, standardized reporting practices, and strengthened customer due diligence under revised Circular 09. If fully implemented by January 2026, these reforms could pave the way for Vietnam's removal from the gray list.

Enhanced Investor Confidence

A clear regulatory environment enhances investor confidence through legalized exchange operations and strong compliance standards. International crypto businesses, venture capitalists, and tech firms gain reassurance from Vietnam's transparent regulatory approach.

Seamless integration between crypto and traditional banking improves access to capital markets and institutional finance. This integration supports broader economic development while maintaining regulatory oversight.

Conclusion

Vietnam's comprehensive crypto law represents a strategic approach to addressing FATF concerns while fostering digital innovation. The legislation establishes clear regulatory frameworks, enhances enforcement capabilities, and creates attractive conditions for technology investment.

By aligning its crypto regulations with international standards, Vietnam demonstrates how emerging economies can leverage digital asset regulation to enhance their global financial standing. The law's success could serve as a model for other countries seeking to balance innovation with regulatory compliance.

Vietnam's path to FATF compliance through crypto regulation highlights the evolving relationship between digital assets and traditional financial oversight. As the country implements these reforms, it positions itself as a leader in responsible crypto regulation and digital economic development.