The Vietnam dong
currency scam is in fact not the first of its kind. Its now heavily written
about predecessor is the Iraqi
Dinar scam. This week’s post will be focussed on drawing parallels between
the two, by which I hope to help warn any potential future “investors”, as
scammers look for fresh victims by pushing a new currency – the dong.
A common tactic for the
Iraqi dinar scam was for the online sellers to greatly exaggerate real world
events and how an “imminent” a positive currency revaluation would result. In
the case of Iraq, this frequently involved promoting the county’s “vast” natural
oil fields. The same tactic can now be seen for the Vietnamese dong. They try
to push the currency by taking the victim’s attention away from chronic
inflation problems and frequent devaluations, by instead exaggerating the
economic impact of increasing exports
and big multinational manufacturers such as Samsung setting up factories there.
Please note that the dinar was on the verge of its “imminent” revaluation for
the best part of a decade (and for those “investors” unwilling to accept they
were scammed, it still is).
Much of the success of
the dinar scam was attributed to the fact that the buyers could physically hold
the fiat currency and feel the security associated with this. While this sense
of security remains a debated topic for even the most developed non-asset
backed currencies, in the eyes of an American buyer, it should be almost
non-existent for the dong due to its illiquidity.
Even if by some miracle
the dong did positively revalue, there is not a legitimate FX exchange in the
United States that would touch it and even less chance that the original seller
will buy it back. Furthermore, it is technically illegal to be holding it
outside of Vietnam, so anybody caught “smuggling” it back in to exchange it
would have the amount seized and risk arrest and imprisonment in Vietnam. Even
if it was successfully smuggled back in, it would have to be exchanged at a huge
discount on the black market.