Zhang Jian, founder of the Chinese stock exchange crypto Fcoin, revealed in today's entry that FCoin may not be able to pay 7,000-13,000 BTC (that is 67 million dollars to 125 million dollars), which he owes users.
According to Zhang, the stock exchange has not been hacked and is not a scam exit. But the evidence suggests that this could be it.
Zhang claims that the closing of the stock exchange is the result of a series of internal data errors and decisions that are too complicated to explain.
After the launch of the FCoin exchange in May, reported trade volumes became one of the largest in the world overnight, with a new business model called "transaction mining". Later one of the Redditors reported that the volume was in fact false. The FCoin order book seems to be full of bots. "The FT price is constantly being manipulated," wrote one Redditor, who also described the exchange as fraudulent.
The business model was suspicious from the start. There was no drop or ICO at launch. FCoin distributed 51% of its native tokens to users in order to refund transaction fees. Users were encouraged to transact as often as possible as the platform returned 100% of the transaction fees they paid on FT tokens. Subsequently, 80% of the exchange's daily revenues from transaction fees were returned to users.
Zhang said that errors were detected in the FCoin system since 2018, but he did not explain why FCoin did not solve these problems before it was too late.
The platform was suspended a few days ago on its own account in order to control risks. This caused a lot of speculation that the project was closed and its operators used it as an excuse to disappear.
In the last few sentences on his blog, Zhang claimed that he would personally handle user emails asking for a payout. He also mentioned that he would compensate users' losses from profits he could make from other projects. However, he did not mention what specific project he was working on or when he would be able to pay back the money he owes users.
