A few days ago we reviewed the closing of the Chinese exchange FCoin, a platform that reached great relevance last year. When, overnight, it became one of the largest cryptocurrency exchanges in the world. However, the company’s refusal to pay its users the money they had within the platform has led to it being accused of being a scam. Meanwhile they argue that their exit from the market would be the fault of the auditors.
The rise and fall of FCoin
The cryptocurrency market is one of the wildest in the world. With companies related to Blockchain technology ascending and collapsing in a few months. Surviving only those that have the ability to adapt to the changes that occur daily in the crypto market.
Therefore, the arrival of FCoin to the exchange market less than two years ago did not surprise anyone. And less so that in a short time it became one of the most important exchanges in the world. Surpassing in volume of transactions several of the oldest and most consolidated exchange platforms in the world.
According to the company, this was achieved thanks to the use of a trading method invented by them, known as “mining transactions.” However, research carried out later indicated that the high volumes of transactions were due to the use of bots within the platform.
These denunciations found echo in important figures of the crypto world. Including the founder and CEO of Binance, Changpeng Zhao. Who since mid-2018 called FCoin a Ponzi scheme. Warning that those who participated in this platform could see their savings in danger. As finally happened with the bankruptcy of the company.
Scam or incompetence?
And, just a few days ago the Chinese exchange announced the closure of its operations. Saying that they were not in a position to return to their users the money they had within their platform. An amount that is between 67 and 125 million dollars.
Immediately Zhang Jian, founder of the company, tried to explain the situation by saying that it would be the result of inappropriate practices in the company’s internal audit process. While from the crypto community, accusations begin to arrive that everything would be a scam.
And, when reviewing the records of the company’s cold wallets, you can see important transfers to other exchanges. As well as the attempt to hide the destruction of native tokens from the platform, worth 75 million dollars.
Although Jian has said that he will try to make the corresponding payment to his users, using the profits generated by his other projects. The truth is that the majority opinion is that FCoin would not have been anything other than a scam. Highlighting the risks inherent in the use of exchanges without sufficient regulations. And making this our Data of Today here in CryptoTendencia.
International Studies student, interested in economics and international politics. Passionate about the progress of the Fourth Industrial Revolution in general and cryptocurrencies in particular.