The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

FCoin exchange closed, still owes users $125 million! Zhang Jian, the founder of Fcoin from China, revealed in a blog post earlier today that Fcoin may not be able to pay the 7,000-13,000 Bitcoins (worth $67 million to $125 million) it owes users. According to Zhang, the exchange was not hacked, nor was it a scam. But there is evidence that may be the case.

According to Zhang, the shutdown was the result of a series of internal data and decision-making errors that were too complex for him to explain: “This is a somewhat complicated issue that cannot be explained in one sentence, and the time span is also very long. Big, the progress of the two lines is going on at the same time, and they influence each other at the same time, ultimately leading to the current consequences.”

The beginning of a nightmare

After the launch of FCoin in May, the exchange's reported trading volume became the world's largest overnight, with its "first-of-its-kind" new business model called "transaction mining." A Reddit user later reported that the volume was actually fake. The FCoin order page seems to be full of bots. “The price of FT is constantly being manipulated,” wrote one Reddit user, who also described the exchange as a scam.

The business model was questionable from the start. There will be neither airdrop nor ICO at launch. FCoin distributes 51% of its platform tokens to users to offset transaction fees. Users are encouraged to trade as frequently as possible as the platform refunds 100% of the trading fees they have paid in FT tokens. 80% of the exchange’s daily trading fee revenue is then returned to users.

CEO Changpeng Zhao began warning about the FCoin Ponzi scheme in mid-2018. He also commented on Zhang’s post on Twitter:

“I rarely call anyone out except for exceptional cases. On Chinese social media, I called FCoin a pyramid scheme in mid-2018. Their founder called his scheme a “better invention than Bitcoin.” That's for me. About themselves? Who would say that? Except for liars."

Zhang said that there have been errors in the FCoin system since 2018, but he did not explain why FCoin failed to solve these problems in time: "As the investigation deepened, we discovered a large number of existing data problems with interest and mining income, which The problem has existed for many days. As a result, a large number of users have caused asset contamination through operations such as buying and selling various currencies, withdrawing cash.”

In order to control risks, the platform suspended operations a few days ago. This has led to a lot of speculation that the project is shutting down and its operators are using this reason as an excuse to disappear.

final struggle

In the final sentences of his blog post, Zhang claimed that he would personally handle users’ withdrawal email requests. He also mentioned that he would use the profits he made from other projects to compensate users for their losses. But again, he didn't mention the specific projects he was working on or when he would be able to pay back the money he owed users.

Multiple Chinese media reported that Zhang Jian may face potential civil litigation in the near future as he admitted to owing $125 million in debt to users. However, considering that the exchange is registered overseas and Zhang has also moved out of China, it may be difficult to find a legal solution in the country for the FCoin case.