Shortly after revealing the insolvency of his China-based crypto exchange FCoin, resulting from an alleged loss of $130 million worth of Bitcoin, Zhang Jian disappeared—leaving FCoin users and investors in its native token suspecting foul play.
Today, the FCoin founder reemerged with fresh claims that all user funds will be returned and that the exchange will soon reopen, according to a post on the exchange’s support page.
The Chinese crypto exchange has been entangled in allegations of running an “exit scam” ever since Zhang delivered his “FCoin Truth” letter to the firm’s users, giving his side of the $130 million shortfall. At the time, the exchange appeared to be gone for good.
But according to the latest post, FCoin has now created an “interim committee” that will oversee the relaunch of the FCoin and FMex websites, formulate a compensation plan for lost funds, and then hand the website back to “the community.”
In the past, FCoin referred to itself as a “community-owned” exchange whose decisions were proposed and vetted by its users. Nevertheless, its “community” now suspects the company of only caring about the price of the FCoin token (FT), which was used by the exchange to incentivize trades on its platform. Zhang and FCoin now face accusations of tampering with crypto markets to ensure the success of FT, and then running off in an “exit scam” with millions in user funds when the company failed.
Blockchain researchers at AnChain.AI recently put forth in a report that FCoin’s claims of “technical difficulties” for its shortfall of $130 million in Bitcoin may, in fact, have been a planned exit. Their analysis shows that funds were disbursed from the company’s cold wallets to several other unknown accounts, culminating with a final transaction days before the company announced it was insolvent.
The report, while not conclusive, has added fuel to the fire that Zhang and FCoin are not being truthful about their claims. Nevertheless, FCoin says it's allowing users to make manual withdrawal claims for their lost funds, and Zhang has said he will personally process them.
Even given the latest announcement of its reopening, the exchange may have a difficult time reestablishing trust from its “community.” Returning lost funds would be a good start.