In the midst of all the happenings in the digital currencies world, Swiss authorities stated that they had shut down providers of E-Coin cryptocurrency based on the conclusion after a long investigation that it was a fake cryptocurrency and that the providers were just stealing money from people who purchased it. According to the Financial Market Supervisory Authority (FINMA), the top Swiss financial authority, several million Swiss francs have been stolen through the process of selling this cryptocurrency.
FINMA has stated that more than 4 million Swiss francs have been paid to the developers of E-Coin for that cryptocurrency. However, it turned out that those developers did not have the required licenses to perform these activities. As a result, Swiss authorities shut down the entire operation and seized the responsible parties. Besides FINMA has also announced that they are taking all actions allowed by the law in order to bankrupt the involved parties and that E-Coin will no longer be available in the market of cryptocurrencies.
Not a Real Crypto
The parties that were involved in the scam are QUID PRO QUO Association that worked together with DIGITAL TRADING AG as well as with Marcelo Group AG in an effort to develop this cryptocurrency. Swiss authorities have stated that E-Coin does not have any similarities with the other cryptocurrencies. Unlike Bitcoin and other cryptocurrencies that use blockchain technology to store the assets, E-Coin developers have been using the standard local servers for the same purpose.
One of the biggest indications of the fraud with E-Coin was the fact that developers claimed that this fake cryptocurrency was 80 percent backed by real and tangible assets, which was just a complete lie. Additionally, the authorities have discovered that big amounts of E-Coins have been issued without having the assets to back.
Cryptocurrency Frauds Running Rampant?
According to FINMA, this is not the only fraud case that they have been investigating recently. They mentioned that they are currently in the process of investigating another eleven cases of possible frauds involving cryptocurrencies. They have recommended to investors to visit their website in order to gather enough information about fake cryptocurrencies and protect themselves and their funds.
Authorities all over the world keep discovering more and more cases of frauds that involve cryptocurrencies in the last several months. Because of that, many countries worldwide have decided to strengthen their regulations about the cryptocurrency market. In that effort, China has gone the furthest as they have announced that they might be banning cryptocurrencies altogether. China’s biggest cryptocurrency exchange reacted to that news by announcing that they will be shutting down all their operations at the end of September.
The Swiss case of cryptocurrency fraud is not the only one and authorities will be making new discoveries as they finally have the required software products that could crack the protection and identify the fraudulent activities involving cryptocurrencies. Financial authorities all over the world started to implement new regulations that made cryptocurrencies subjects of investigations and as the time goes by those regulations will only become stronger.
Written by Ivan Potocki
