LEGAL BASIS FOR WEFINEX
Recently, Wefinex is being concerned as a simple but extremely effective online platform for making money. Users do not need to know much about financial knowledge. What they only do is to take a few simple manipulations, then they can earn up to hundreds of millions VND per month. This exchange is attracting more and more users of all ages and all walks of life.
So how does the Vietnamese Law stipulate this Wefinex platform? Is it legitimate under this legal system? In the following article, DTD will clarify Wefinex exchange from a legal perspective.
Wefinex exchange in reality
Wefinex is an electronic trading platform known as Binary Options. There are two ways that users can make money from Wefinex, including trading and acting as an agent.
In trading method, users have to predict how an asset (which can be crypto, gold, securities or stocks) will move (up or down) over a period of certain time. If the prediction is correct, they can earn money, otherwise if it is wrong, they will lose the entire amount that they bet.
Another method is known as acting as an agent. Specifically, users will spend 100$ to buy agent rights. After that, users can call on other subordinates to buy an agent. For each of their bets, no matter what the result is win or loss, users can get 1% of the commission.
Wefinex transaction model according to current Vietnamese law
* For trading method
The remarkable feature of the way of trading on Wefinex exchange is that users place money to predict the value of the property and then make a profit from that prediction. This behavior cannot be considered as investment because it does not belong to any form of investment which is prescribed in Section 1 Chapter IV of the Law on Investment 2014 about the forms of investment in Vietnam (including Investment in establishing a business organization, Investment by contributing capital, buying shares, or buying capital contributions of business organizations, Investment under PPP contract, Investment under BCC contract). The type of trading that users bet money on the unknown and unpredictable outcome is an expression of the form of gambling.
Clause 1, Article 1 of the Resolution No. 01/2010/ NQ-HDTP on Guiding the application of provisions of Articles 248 and 249 of the Penal Code stipulates:
“Article 1. Regarding provisions of Article 248 of the Penal Code
1. “Illegal gambling” means gambling acts in whatever form for the purpose of earning winnings in cash or in kind without permission of a competent state agency or with permission of a competent state agency but not complying with the granted license.”
As such, the fact that Wefinex users make money deposit and unlicensed transactions can constitute an illegal gambling offense in accordance with the Penal Code. The organization of such an exchange by Wefinex may constitute a crime of organizing gambling according to Article 322 of the 2015 Penal Code, amended and supplemented in 2017 about organizing gambling or running gambling-dens.
* For agent method
Clause 1, Article 3 of the Decree No. 40/2018/ND-CP on Providing regulatory framework for multi-level marketing stipulates:
“Article 3. Interpretation of terms
1. “multi-level marketing” means a business model that utilizes the network of participants at different levels wherein commissions, bonuses and other economic benefits are or may be paid to participants based on their personal sales and the sales made by other distributors below the participants, also known as downline distributors.”
Thus, the method of acting as an agent on Wefinex is a form of multi-level marketing, as the system divides users into several levels, one can call on his or her subordinates to buy agents and receive commissions from the transactions of those subordinates.
Also, Point 4, Clause 2, Article 4 of this Decree stipulates:
“Article 4. Subject of the multi-level marketing
2. The following goods cannot be sold through the business model of multi-level marketing:
[...]
b) Digital content products.”
In Wefinex platform, users get commissions after each of their subordinate participants’ online transactions. As such, the business object here is online transaction, known as "digital content products" (information and content products, including documents, data, images, sounds; which are displayed in the digital form, stored and transmitted in the network environment - according to provisions of Clause 11, Article 3 of Decree No. 71/2007/ND-CP on Detailing and guiding the implementation of a number of articles of the Law on Information Technology regarding information technology industry). This object is not allowed to be taken business by means of multi-level mode according to the Decree No. 40/2018/ND-CP on Providing regulatory framework for multi-level marketing.
It can be clearly seen that Vietnamese Law has not yet set out any specific regulations for an electronic trading platform of binary options like Wefinex. Wefinex is not prohibited, and neither is legal under Vietnamese law. This means that individuals making an investment in Wefinex may suffer from legal risks, especially when losing money or being cheated. In that event, they have to be solely responsible for that without receiving any protection from the law. Therefore, you should be highly aware before joining this online platform.
