Zhang Jian founder of Chinese cryptocurrency exchange FCoin revealed that the crypto exchange platform is unable to pay back $125 million owed to customers in crypto deposits.
Through the blog post on the FCoin website , Jian revealed that crypto exchange can not pay back from BTC 7,000 and BTC 13,000. FCoin’s problems are, according to the post, not an exit scam or a hack but a collection of mistakes in data and decisions.
An excerpt from the post reads:
“The biggest problem that FCoin currently faces is not the problem that the system cannot be restored, but the problem that the capital reserve cannot be paid by users… This is a problem that is a little too complicated to be explained in a single sentence, the time span is also large, and the two-story development lines are advancing and affecting each other at the same time, leading to the final outcome.”
Despite the shortfall in the assets of the platform, Jian has revealed that he is still personally managing customer withdrawal requests that began earlier in February. The mail-withdrawal process will continue for the next two to three months, according to the FCoin chief.
Jian also announced the launch of a new project and that the profits from the venture will be used to compensate FCoin’s customers on the basis of a remediation plan to be disclosed in the future. Such a long-term repayment plan could last between one to three years.
FCoin now joins, to name but a few, the ranks of failed crypto exchanges like Cryptopia, Altsbit, and MapleChange.
Jian’s blog post also offered a post-mortem of FCoin’s failure which centers around the trans-fee mining model — the novel operational matrix adopted by the exchange upon its launch in May 2018.
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