Swiss shuts down 'fake' E-coin provider

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Swiss shuts down fake E-coin provider
Virtual currencies such as Bitcoin, which are issued and usually controlled by their developers and not backed by a central bank, are hailed by their supporters as a fast and efficient way of managing money.

geneva - Financial watchdog is investigating around a dozen other possible fraud cases

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Published: Tue 19 Sep 2017, 6:28 PM

Last updated: Tue 19 Sep 2017, 8:30 PM

Switzerland's financial watchdog has closed down what it said was the provider of a fake cryptocurrency and is investigating around a dozen other possible fraud cases, in the latest clamp-down on the risks involving virtual money.

The move by the Finma watchdog comes on the heels of Chinese authorities ordering Beijing-based cryptocurrency exchanges to stop trading and immediately notify users of their closure.

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 4 million Swiss francs ($4.2 million) from several hundred users, Finma said.

"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, 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. - Reuters

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