FCoin, a crypto exchange based in China, has declared that it will officially resume operations.
After the firm announced bankruptcy, a committee was formed, pledging eventually to return funds to customers.
The crypto exchange will restore operations of FCoin and FMex websites, and will then hand them over to an “interim committee.”
The committee will introduce a compensation plan for the bankruptcy-affected users. There are no details available as regards the compensation, but the announcement indicated that it could be creditor’s rights or private equity.
Eventually, upon completion of the payment plan, the platform’s ownership will move to the community.
However, the company has not unveiled the date of resuming operations.
The announcement of relaunch comes less than two weeks after the exchange declared going bankrupt.
Zhan Jian, founder of FCoin, said his company faced a financial crisis, and thus could not process customer withdrawals, ranging between 7,000 and 13,000 BTC.
Jian added in a post published on Reddit:
“FCoin’s transaction-fee mining model was responsible for its insolvency.”
Crypto exchange owes $125M to customers
Earlier, Cryptolydian reported Jian as saying that the platform is unable to pay back $125 million owed to customers in crypto deposits.
The company said on its website:
“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.”
Jian manages withdrawal requests
Despite the shortfall in FCoin’s assets, Jian indicated that he is still managing the withdrawal requests that began since the beginning of February.
The withdrawal process will continue for the next two to three months, he added.
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 the ranks of failed crypto exchanges such as Cryptopia, Altsbit, and MapleChange.