The State Securities Commission of Vietnam (SSC), on Wednesday, issued a warning to investors regarding the risks involved in using unlicensed wealthtech apps.
In a statement on its website, the SSC said that there are “several businesses that own online investment apps such as Passion Invest, Finhay, Tikop, Infina, Savenow, BUFF…raising capital from investors in the form of business cooperation contracts, fund management and securities portfolio management activities, which are not licensed by the SSC”.
“Investors may be at risk when a dispute occurs without the protection of their rights and interests by the securities law. SSC recommends investors to be cautious when trading on these apps and investors are responsible for risks that may arise,” the statement read.
The SSC is an organisation under Vietnam’s finance ministry responsible for the regulation and supervision of the securities market.
Vietnam witnessed a wealthtech boom during the pandemic as scores of young people in the Gen Y and Gen Z cohorts tried their hand in wealth management, pushed by the promise of higher returns and low interest rates at banks.
The interest in wealthtech caught the attention of investors.
In June this year, robo-advisor Finhay announced it bagged a $25-million Series B funding round co-led by Openspace Ventures and VIG. The round also saw participation from Insignia, TVS, Headline, TNBAura and IVC.
Finhay also completed the acquisition of the securities company Vina Securities (VNSC) for an undisclosed amount in June, making it the only licensed digital investment platform in Vietnam.
Founded in 2017, Finhay allows users to invest in financial products, starting at just 50,000 Vietnamese dong ($2.2).
In an interaction with DealStreetAsia, Finhay’s founder Nghiem Xuan Huy said that the company is in the process of transferring its services to VNSC.
Another venture-backed wealthtech app is Infina which in February raised an additional $4 million in seed funding bringing the total corpus raised in the said round to $6 million. Investors participating in the round include Sequoia Capital India’s Surge, Y Combinator, Saison Capital, Starling Ventures, Alpha JWC, and AppWorks.
Other startups such as Anfin, a Vietnam-based fintech firm with a proprietary stock trading platform, also announced in June that it raised $4.8 million in its pre-Series A funding round led by Y Combinator and Clement Benoit, the founder of Stuart & Not so Dark.
Passion Invest says on its website that it offers a business cooperation product with a minimum capital requirement of 200 million dong for most individual customers. In addition, individual customers with large capital and institutional clients can use a separate account management product of Passion Investment starting with 50 billion dong.
“With the booming of many online investment applications on the market, the warning notice from the SSC is a completely reasonable decision to ensure the interests of investors,” an industry expert, who did not wish to be named, told DealStreetAsia.