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Alternative Market Briefing

Swiss financial supervisor closes down fake cryptocurrency issuer, investigates other similar businesses

Wednesday, September 20, 2017

Benedicte Gravrand, Opalesque Geneva:

Switzerland's financial supervisor has closed down the unauthorised provider of the fake cryptocurrency E-coin, which managed to siphon Chf4m ($4.15m) from several hundred users.

According to the Financial Market Supervisory Authority (FINMA)'s statement, "for over a year since 2016, the QUID PRO QUO Association had been issuing so-called "E-Coins", a fake cryptocurrency developed by the association itself. Working together with DIGITAL TRADING AG and Marcelco Group AG, the association gave interested parties access to an online platform on which E-Coins could be traded and transferred. Via this platform, these three legal entities accepted funds amounting to at least four million Swiss francs from several hundred users and operated virtual accounts for them in both legal tender and E-Coins. This activity is similar to the deposit-taking business of a bank and is illegal unless the company in question holds the relevant financial market licence."

FINMA launched enforcement proceedings against those involved and has liquidated the three legal entities. As they are insolvent, FINMA has also launched bankruptcy liquidation proceedings against them, and was able to seize and block assets to the value of about Chf2m.

E-Coins are not a real cryptocurrency, it says. The real currencies are stored on distributed networks and use blo......................

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