The revelation of a novel situation at the Chinese Exchange, Fcoin, seems like a blatant attempt to scam its’ users. The series of events, transfer of funds, and withdrawal “promises” are all screaming foul play.
Most importantly, the exchange claims that the withdrawals have been stopped. However it continues to move Bitcoins from its cold wallets. Leading crypto analyst, Dovey Wan from Primitive crypto notes in a series of tweets,
…tracking on Fcoin’s Bitcoin cold wallet shows the majority of its asset has been transferred to other exchanges …address: 12rU7whLERNrkDb8bTe9VJJSKZvCXy7dj7
According to the data schematics by CoinDotInfo, on 14th February 2020 BTC was moved to major exchanges including Binance, Huobi, Okex, Gate.io, Bithumb and so on.
Withdrawal Promises or the Final Stage of the Scam?
Exchange founder, Zhang Jian took full responsibility of the inefficiency of his exchange; claiming that it is neither a hack nor an internal theft of any kind. The economics of FT coin developed a flaw which distributed hefty rewards to many stakeholders.
Moreover, Jian was fairly vague on the current status of the fund at the exchange and the withdrawal timeline. Apparently, he has divided the process into two phases. One that will take around 2-3 months, and other long-term, might take upto 1-3 years.
Jain wrote,
Once the new project is on track, I will begin the long-term mail withdrawal process, which may take 1-3 years. In addition, for the other losses of FT and FMEX investors, I am also willing to use the profit of the new project to compensate.
The decisions will be taken arbitrarily by Jian himself. To compensate the users, he plans to switch to new projects and reimburse users from the profit. The users can only hope that he holds up to his words. However, currently, all it sounds like is an empty promise.
What a SHAMELESS scammer – Dovey Wan
Wan also reveals the series of events that led the final scam.
First, they used the new technique made famous by Stellar and Okex, Coin Burn, to create FOMO. By arbitrarily deciding to decrease the total supply of the pre-mined crypto, FT coin began pumping on February 10. Wan notes,
Retail speculators saw it, deposited real assets, traded the pump hope to profit
And then, prestige. 11 hours after the first announcement, the exchange how reveals an “IT system risk”, and halts exchange operations. Essentially, the funds are as good as lost. The total estimated amount is nearly 13,000 BTC (over $115 million).
at the end of its “truth” announcement, the founder of Fcoin said ”I have decided to switch tracks my new project to compensate everyone for their losses” This is a nice way of saying “sorry but you are ripped off“
?????? THIS IS CRYPTO
Do you think that legal action could reimburse the user? Please share your views with us.
