Swiss financial institution closes fake cryptomoeda scheme "E-Coin"

Switzerland's financial watchdog has stifled E-Coin's alleged crypto-bull fraud.

The Swiss Financial Market Supervisory Authority (FINMA) has revealed the closure of three separate companies involved in the issuance of "E-Coin", alleged by the authority as a false cryptomoeda.

In an announcement, it revealed that the Quid Pro Quo Association has developed and started issuing E-Coins since 2016. The company, working with Digital Trading AG and Marcelo Group AG, also launched an online trading platform for E-Coins to be negotiated and transferred. Since 2016, the three companies have raised about 4 million Swiss francs (about $ 4.1 million) from hundreds of Swiss investors.

The authority wrote:

"Through this platform, these three legal entities have accepted funds worth at least 4 million Swiss francs from hundreds of users and operated virtual accounts for them in both legal and E-Coins."

As regards FINMA, it seized and blocked assets worth about two million Swiss francs.

The authority notably distinguished E-Coin from decentralized and Blockchain-based cryptomoeda.

"Unlike the actual crypto-coins, which are stored in distributed networks and use Blockchain technology, the E-Coins were completely under the control of vendors and stored locally on their servers," the regulator said.

In addition to its investigation into E-Coin, FINMA also confirmed that it was conducting eleven separate investigations into "other presumably unauthorized business models related to these [false] coins."

The financial regulator has in the past adopted Bitcoin startups in granting early "conditional approval" to the Xapo portfolio operator to operate in the country. FINMA is particularly tasked by the country's Federal Council to grant FinTech licenses to industrial companies as part of FinTech's favorite agenda.

With its crackdown on E-Coin operators, FINMA also launched law enforcement proceedings against those involved and liquidated the assets of the three companies.