Speaking at a policy forum on crypto exchange pilot on Wednesday, To Tran Hoa, deputy head of the crypto market management board under the State Securities Commission of Vietnam, said the creation of a legal framework is no longer optional but necessary to comply with global anti-money laundering standards.

“Once the first licensed domestic exchange becomes operational, all transactions by Vietnamese investors must be conducted on that platform,” Hoa said. “Unpermitted platforms will not be allowed to provide services in Vietnam under Resolution 05, which governs the pilot implementation of the digital asset market,” he added.

The proposed regime would mark a significant shift in Vietnam’s approach to digital assets, where trading has largely taken place on offshore platforms.

Authorities say the absence of a formal legal framework has made it difficult to monitor capital flows, with funds frequently moving to overseas exchanges beyond the reach of domestic regulators.

Regulators signaled that compliance requirements will be stringent, especially for foreign platforms seeking to operate in Vietnam.

Global exchanges such as Binance would need to meet conditions including local data storage and full tax compliance to be considered for licensing.

Hoang Ngoc Bach, a senior official at the cybercrime unit A05 under the Ministry of Public Security, said the lack of regulation has complicated investigations, particularly in cases involving cross-border financial transactions.

The new framework will introduce licensing and supervisory mechanisms, with regulators assessing not only statutory requirements such as charter capital and ownership structure, but also operational capabilities - including technology systems, management expertise, and transparency standards.

Officials also issued a caution to retail investors, particularly newcomers. “At this stage, we do not recommend first-time investors entering the market,” Hoa said, highlighting the risks associated with a still-developing regulatory environment.

Industry participants say user trust will be a decisive factor as the market transitions toward a regulated model.

Nguyen Ngoc Son Quynh, strategy chief at MEXC in Vietnam, said transparency is becoming a baseline requirement rather than a competitive advantage.

In a market that has seen multiple incidents related to asset safety and disclosure, she said exchanges should adopt mechanisms such as proof of reserves, allowing users to verify asset backing in real time.

Beyond internal reporting, regular disclosure aligned with auditable standards will be essential to building long-term credibility, she added.

The Ministry of Finance (MoF) has shortlisted five digital asset exchange applicants for pilot licensing, after determining that five out of seven submissions meet regulatory requirements while two remain incomplete.

The five eligible include VIX Digital Asset Exchange JSC (VIXEX), Loc Phat Vietnam Crypto Asset Exchange JSC (LPEX), Vietnam Prosperity Crypto Asset Exchange JSC (CAEX), Techcom Digital Asset Exchange JSC (TCEX), and Vietnam Digital Assets JSC, the ministry said in its official document.

An estimated 17 million Vietnamese already trade cryptocurrencies, with an annual digital asset transaction volume estimated at over $100 billion, according to VinaCapital. Transactions take place on offshore exchanges such as Binance, Bybit, and others, in Singapore, South Korea, and Hong Kong.