Swiss Miss: Agency Closes Down Faux E-Coin

Crime, News, Regulation | September 20, 2017 By:

E-Coin is no cryptocurrency, according to Swiss officials. The regulators have shut-down a bogus crypto called “E-Coin” that generated $4.2 million (4 million Swiss francs) in revenue for its creators.

The Financial Market Supervisory Authority of Switzerland (FINMA) closed down the site after discovering it didn’t have the required banking license. The agency also said it has taken actioin to bankrupt the accused parties through legal procedings, although details on that action were not available. ┬áThe groups responsible included the Quid Pro Quo Association, which manufactured the bogus coins; and two other businesses, Digital Trading AG and Marcelo Group AG.

“Generally, regarding Swiss regulation in the area of fintech/cryptocurrency, I can state that FINMA as supervisory authority applies the currently applicable financial market regulation and intervenes if regulations are breached,” a spokesman for FINMA told CNBC.

The allegedly bogus coins were stored on local servers rather than via a decentralized blockchain. In a press release announcing the closings, FINMA said that the E-Coins were issued without sufficient asset backing, leading to “a progressive dilution of the E-Coin system to the deteriment of investors.”

FINMA claimed it was investigating 11 other businesses for cryptocurrency scams.