Vietnam’s Diamond Market Is Facing A Crisis Of Trust 

Diamond stores are shutting down across Vietnam. Investors are rushing to sell their diamonds as confidence in the market collapses. In just two months, the country's diamond market has plunged into an unprecedented crisis.

The panic began after Vietnamese police uncovered a transnational diamond smuggling ring on June 20, 2026. Among those implicated was Phạm Ngọc Thảo, the former director of PNJ Lab, PNJ’s gemstone certification unit. The case has dealt a major blow to one of the two largest gemstone corporations in Vietnam and raised broader concerns about trust and transparency in Vietnam’s diamond market.

28,000 Diamonds And A Crisis Of Trust

Diamonds are a unique asset. Their value depends on the color, clarity, cut, and carat weight, as well as the grading certificate that verifies a stone's authenticity and quality. Unlike gold, diamonds do not have a publicly quoted market price. Buyers rely on grading reports, proof of origin, and the reputation of the seller to determine whether a diamond is genuine and fairly priced.

According to Vietnamese investigators, Phạm Ngọc Thảo, the former director of PNJ Lab, allegedly worked with a diamond smuggling ring to import illegal diamonds, remove their original GIA identification numbers, engrave new serial numbers, and issue new grading certificates before selling them for profit. Since 2024, the network is alleged to have carried out 141 smuggling trips, bringing more than 28,000 diamonds into Vietnam with an estimated revenue of VND 280 billion.

The case has shaken confidence in the very document that underpins the diamond trade: the grading certificate. If certificates can be forged or manipulated, buyers can no longer be certain that a diamond is what it claims to be.

Although PNJ has insisted that the diamonds it sold to customers were not linked to the 28,000 smuggled stones, the scandal has become the biggest reputational challenge in the company’s history. As of July 20, 2026, PNJ's share price had fallen by around 30%, wiping roughly VND 10 trillion off its market value. Bill Gates, reportedly one of PNJ's shareholders, also sold his entire stake of more than 830,000 shares.

Beyond the damage to PNJ, the scale of the smuggling operation has raised broader concerns about the reliability and transparency of Vietnam's diamond market. In recent days, diamond and jewellery stores across Ho Chi Minh City and other cities have temporarily suspended operations, while some have shut down altogether as a wave of investors rushed to sell their diamonds, triggering a liquidity crunch.

In a statement, Hoàng Thứ Jewellery, a diamond retailer in Ho Chi Minh City, said it had tried to continue operating but that “market conditions had changed beyond expectations,” forcing the company to suspend operations while it restructures.

Not every diamond retailer is linked to the alleged wrongdoing. But when consumers can no longer distinguish between trustworthy businesses and those under suspicion, the most common response is to delay purchases—or sell the diamonds they already own.

An Assessment Of The Current Market

Amid a wave of investors rushing to sell their diamonds and retailers facing a liquidity crisis, experts say this could be a crucial moment for the market to reassess how diamonds are valued.

Since the mid-2000s, when Vietnam’s diamond market entered a period of rapid growth, many retailers introduced buyback or exchange programs, offering customers 85% to 95% of the original purchase value. These policies became an effective competitive tool, helping build consumer confidence while encouraging people to purchase high-value products.

Such programs shaped the perception that diamonds were not only luxury jewellery but also an asset that could easily be converted into cash when needed. According to diamond expert Nguyễn Việt Hào, this expectation has made Vietnam’s diamond market more vulnerable to sudden changes in consumer sentiment.

However, unlike gold, which has publicly available prices and is easy to estimate the value, diamonds are far more complex. Their value depends on a combination of characteristics unique to each stone, making pricing less transparent.

Many investors only discovered when trying to resell their diamonds that finding buyers was not always easy. Some retailers only accept diamonds originally purchased from their own stores, while changes in a stone’s carat weight, colour, clarity, or cut can significantly reduce its resale value—sometimes by 50% to 60% compared with the original purchase price.

In comparison, according to expert Nguyễn Việt Hào, in markets such as the United States and other developed economies, diamonds are primarily viewed as consumer products with aesthetic, brand, and personal value, similar to watches and luxury bags. Businesses typically focus on trade-in programs or buybacks under specific conditions, rather than offering high guaranteed repurchase rates.

“This crisis could become an opportunity for the market to adjust in a healthier direction. Consumers will gradually understand that diamonds are luxury jewellery, not a tool for storing wealth,” Hào told VnExpress.

The diamond smuggling investigation is not over. Besides PNJ, police have continued to uncover another 3,400 smuggled diamonds that were allegedly legalised and distributed through SJC, another major player in Vietnam’s jewellery industry. Phạm Thị Hồng Duyên, head of the Business Department at SJC, has been arrested in connection with the case.

The investigation is still expanding as authorities continue to identify other individuals who may be involved. Meanwhile, the full extent of the damage to Vietnam’s diamond market remains unclear. But for diamond holders, the turmoil serves as a reminder that owning diamonds comes with risks. As the market matures, transparency, independent certification, and realistic expectations may become more important than promises of easy resale.