"Swiss regulator probes ICOs following fake coin scandal"

We last checked in on Swiss cryptocoins a few weeks ago in "News From Switzerland's Crypto Valley: "Crypto piggybank foundations proliferate in Zug""

From Swissinfo, Sept. 29:

Ten days after shutting down a fake cryptocurrency scam, the Swiss financial regulator said it is investigating the procedures for setting up new companies in the rapidly expanding sector.

The Swiss Financial Market Supervisory Authority (Finma) issued guidanceexternal link on Friday after noting “a marked increase in initial coin offerings (ICOs)” in Switzerland. ICOs are a form of crowdfunding that allow blockchain start-ups to accumulate capital to develop their nascent technology.

Switzerland, and in particular canton Zug, has become a global hotbed for ICO activity in recent months. Financial services firm PwC found that Switzerland hosts four of the largest ten ICOsexternal link to date, which is more than the United States or China.

Around a quarter of the $2.1 billion (CHF2 billion) raised by ICOs this year is believed to sit in the vaults of Swiss-based foundations.

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But the largely unregulated sector has started to attract negative headlines of late. China and South Korea have both slapped bans on further ICOs while the US Securities and Exchange Commission (SEC) has ruled that all tokens issued by ICOs are securities – placing them under strict stock market rules.
The ICO boom has also raised questions in the Swiss parliament by politicians who are concerned that the phenomenon could damage Switzerland’s reputation.

Money laundering rules
Last week, Finma launched bankruptcy proceedings against three companies that had been selling the fake cryptocurrency E-Coin to the public. The regulator said at the time that it was also investigating 11 other suspicious cases.

“Finma cannot rule out that ICO activities may be fraudulent, especially in light of current market developments,” it said in its latest statement on Friday....MORE