*CRACKDOWN -VIETNAM- CRYPTOCURRENCY *

VIETNAM eyes cryptocurrency crackdown after alleged $660 million scam.

Vietnam has vowed to tighten regulations on cryptocurrencies as authorities investigate an alleged  multi-million dollar fraud in the country, where digital units are traded in a shadowy and unregulated market.

Paying with cryptocurrencies is illegal in Vietnam, where they are not recognised legitimate tender by the central bank.

However, there are currently no laws explicitly banning the possessions of assets such as Bitcoins and Ethereum.

A directive signed by the Prime Minister Nguyen and Xuan Phuc on Wednesday called for new rules to ''strengthen the management of all activities related to cryptocurrencies.

It comes after a Vietnam company, Modern Tech Jsc. was accused of scamming $660 million from  tens of thousands of people who bought iFan and Pincoin cryptocurrencies, according to state media.

The Ho Chi Minh City-based company promised to repay clients monthly interest and more if they could attract other customers - but has been slow to pay them back as the value of the iFan and  Pincoin slumps, VNExpress reported.

City authorities have asked police to investigate.

Investing and trading the currencies is ''increasingly complicated and threatens to affect the stability of the market, social order, and can pose great risks to organisations and individuals involved,'' the new directive said.

It warned financial institutions against accepting the currencies and said authorities would ''detect and handle'' those dealing in the illegal currency [Agencies]