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Switzerland shuts down fake cryptocurrency

by on19 September 2017

In the good old days all you had to worry about was Nazi gold

Switzerland’s financial watchdog FINMA has closed down what it said was the provider of "a fake" cryptocurrency and is investigating around a dozen other similar "fraud" cases.

The Swiss are not the only ones, Chinese authorities are ordering Beijing-based cryptocurrency exchanges to stop trading and immediately notify users of their closure.

Virtual currencies such as Bitcoin are getting regulators rather cross about the risks of fraud in the burgeoning online cryptocurrency underworld.

The QUID PRO QUO Association shut down by FINMA had provided so-called E-Coins for more than a year and had amassed funds of at least four million Swiss francs ($4.2 million) from several hundred users, FINMA said in a statement on Tuesday.

“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 license,” FINMA, Switzerland’s Financial Market Supervisory Authority, said.

E-Coin was not like “real cryptocurrencies”, FINMA said, because it was not stored on distributed networks using blockchain technology but was instead kept locally on QUID PRO QUO’s servers.

FINMA said it had three other companies on its warning list due to suspicious activity in cryptocurrencies, and was conducting 11 investigations into other possible fake virtual currencies.

The Swiss finance industry has been looking for new avenues of growth following a weakening of its bank secrecy rules during a global crackdown on tax evasion.

Last modified on 19 September 2017
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