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FCoin Clients Not Happy With a “Restart” Plan

Sead Fadilpašić
Last updated: | 2 min read

The presumably failed Chinese FCoin exchange has announced its return to the crypto scene, with a goal to let the community take charge of it, but that community may not be interested. Ever since FCoin announced the loss of funds and the founder published a detailed letter of what allegedly led to the exchange’s failure, many within the community have been shouting ‘exit scam,’ calling for the resolution of the current issues before anything else is considered.

Source: iStock/Egor Shabanov

There isn’t an official announcement on FCoin’s website yet, just a retweet with a link to the support page, saying “FCoin and FMex restart work officially announced.”

According to this post, FCoin has formed a committee, which includes “community representatives,” and whose duty is to oversee the relaunch of the FCoin and contract trading platform FMex websites, to create a compensation plan, and when it’s all operational, to give the control of the website to the community. No specific dates have been given for any of there points, stating it should be done “as soon as possible.”

As the exchange had previously done, it placed the emphasis on the community in this post, but that doesn’t seem to be helping it. The community is worried and angry that this might be an exit scam, with the company and its founder messing with the crypto markets to push up the native FCoin token (FT) before bailing, and even if it weren’t, it’s still a situation that resulted in loss of funds – and the costumers want a full refund first. “Review and publicize the debt situation before discussing other issues,” calls a Twitter user.

Taking all this into consideration, the Cryptoverse is suspicious. Commenting on the recent research by blockchain researchers at AnChain.AI that discusses whether FCoin’s incident was a result of technical difficulties or a planned scam, Emin Gün Sirer, CEO of Ava Labs, said that “all custodial exchanges are inherently insecure,” adding: “Here’s FCoin, one of the largest exchanges by volume, allegedly pulling an exit scam.”

Meanwhile, some users commenting on FCoin’s Official English Telegram account have reported that they got their funds back already, though the withdrawal process is slow.

As a reminder, FCoin had reported severe damage to some of its systems and data, allegedly seeing the founder Zhang Jian disappear, before Jian came out with a letter summarising what has allegedly happened to bring the company to the point of insolvency, saying that the scale of non-payment is between BTC 7,000-13,000 (USD 61.2 million – USD 113.7 million). The withdrawals have started, but Jian stated that there simply isn’t enough money for everybody. Major players in the industry commented on the incident, like Binance’s Changeng Zhao, who reiterated that it’s a scam, and Tron’s Justin Sun, who tweeted in support of the exchange as he is friends with Jian.