Swiss Financial Watchdog Shuts Down Fake Cryptocurrency
By Josiah Wilmoth
The Swiss Financial Market Supervisory Authority (FINMA) shut down E-Coin, a fake cryptocurrency whose developers swindled more than 4 million Swiss francs ($4.2 million) from investors.
According to a FINMA statement, the QUID PRO QUO Association had been issuing E-Coin in cooperation with two other companies since 2016.
Developers had billed E-Coin as a cryptocurrency backed 80% by tangible assets; however, neither of these claims was true. E-Coin was not a cryptocurrency because it did not operate on a blockchain or distributed ledger. Instead, it was stored on QUID PRO QUO’s servers, and investors could only access the coins on an online trading platform.
Based on this finding, FINMA ruled that QUID PRO QUO was essentially operating as a bank but without the required licensure. Consequently, the regulators liquidated the association along with the two other companies it had coordinated with to issue E-Coins to investors.