Possible SCAM E.Coin inflates its price by 4000%
During this Tuesday, February 6, the price of the E-Coin cryptocurrency managed to rise by more than 4,000% only to fall well below its opening price of the day. This despite having been accused of being a “false cryptocurrency” by the Financial Authority of Switzerland.
E-Coin started trading at $ 6.51 but at the beginning of the afternoon it reached a maximum of $ 290.12 , which ranked it in the top 30 of cryptocurrencies with the highest capitalization according to data from CoinMarketCap . A few hours later, the price dropped abruptly and at the time of the edition is at only $ 1.91, establishing itself at the 443th place in the CoinMarketCap cryptocurrency ranking.
Everything seems to indicate that this behavior is attributable to the Pump and Dump strategy, by means of which the price of an asset is inflated to sell it massively at the moment when it is overvalued, causing an abrupt price drop with huge profits for those who bought cheap, and huge losses for those who fell in induced inflation.
And this would not be a surprise. Already last September, the Supervisory Authority of the Financial Markets of Switzerland (FINMA for its acronym in English) had announced the stoppage of operations of E-Coin , accusing its suppliers of advancing a fraudulent scheme with a false cryptocurrency, by accepting more of 4.2 million dollars from investors without possessing the required banking licenses.
Likewise, an organization called Quid Pro Quo Association was identified for the elaboration of these fraudulent cryptocurrencies, who worked in collaboration with two other entities called DIGITAL TRADING AG and Marcelo Group AG. In fact, the Swiss authorities initiated a bankruptcy process against these companies, blocking assets in the amount of more than 2 million Swiss francs.
FINMA specified that E-Coin did not behave like other cryptocurrencies, since it did not use blockchain technology , but was stored on local servers. And this scheme also deceived investors by assuring them that cryptocurrencies would be backed by 80% of tangible assets, but in reality this percentage was much lower, which led the system to a progressive dilution of the value of cryptocurrencies.
At the time of writing, both the alleged official E-Coin page and the developer page are inaccessible. The people responsible for this market manipulation are unknown.