The State Securities Commission of Vietnam (SSC) on Wednesday warned investors about the risks involved in using unlicensed wealthtech apps.
In a statement on its website, the SSC said there are “several companies that own online investment apps such as Passion Invest, Finhay, Tikop, Infina, Savenow, BUFF…Raising capital from investors in the form of business cooperation agreements, fund management and securities portfolio management activities that are not licensed by the SSC”.
“Investors may be at risk when disputes arise without their rights and interests being protected by the Securities Act. SSC recommends that investors exercise caution when trading these apps and investors are responsible for the risks that may arise,” the statement said.
The SSC is an organization of the Vietnamese Ministry of Finance responsible for the regulation and supervision of the securities market.
Vietnam experienced a wealth tech boom during the pandemic, as scores of Generation Y and Z youth dabbled in wealth management, fueled by the promise of higher returns and lower interest rates at banks.
Interest in wealthtech caught the attention of investors.
In June of this year, robo-advisor Finhay announced that it had closed a $25 million Series B funding round co-led by Openspace Ventures and VIG. Also participating in the round were Insignia, TVS, Headline, TNBAura and IVC.
Finhay also completed the acquisition of securities firm Vina Securities (VNSC) in June for an undisclosed amount, making it the only licensed digital investment platform in Vietnam.
Founded in 2017, Finhay allows users to invest in financial products from as little as 50,000 Vietnamese dong ($2.2).
In an interaction with DealStreetAsia, Finhay founder Nghiem Xuan Huy said the company is in the process of transferring its services to VNSC.
Another venture-backed wealthtech app is Infina, which raised another $4 million in seed funding in February, bringing the total corpus raised in this 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 with its own stock trading platform, also announced in June that it had closed in its pre-Series A funding round led by Y Combinator and Clement Benoit, founder of Stuart & Not , 4.8 million dollars has raised so dark.
Passion Invest states on its website that it offers a corporate collaboration product for most retail clients with a minimum capital requirement of Dong 200 million. In addition, large capital retail clients and institutional clients can use a separate account management product from Passion Investment starting at Dong 50 billion.
“With so many online investment applications booming in the market, the SSC’s warning is a perfectly sensible decision to protect investors’ interests,” an industry expert, who asked not to be named, told DealStreetAsia.