For cryptocurrency exchanges, volume is King. A newly created Chinese crypto exchange platform, known as FCoin, has replaced Binance as the world’s largest crypto exchange in terms of trading volume in recent weeks due to its new business model, known as “ trading is mining, and exchange token HODLs will receive dividends”.

But Binance CEO Changpeng Zhao(CZ) cast doubt on the way FCoin adopts to attract investors, by saying that the FCoin’s ‘ trading is mining’ model constitutes not only a “disguised ICO”, but also an “expensive ICO”. He reminds investors to make rational investing decisions.

“If you use BTC or ETH to pay the trading fees on cryptocurrency exchanges, the trading platforms will refund you in the form of exchanges’ own tokens. ” Zhao said. In his opinion, there is no difference between exchange launching an ICO and buying exchanges’ own coins with BTC or ETH.

“If a new exchange use up to 49% of the $ 50 billion company’s valuation to issue its own tokens, are you willing to buy?  Now, they sell the exchange’s tokens to you at this price.” Zhao claimed, “ In contrast, Binance was valued only $160 million when it launched ICO.”

He hinted that FCoin exchange which has issued its own token FCoin Token(FT) is run as a pyramid scheme, but Binance is not involved in any illegal investment scams, because his exchange has the lowest trading fees.

“If an exchange’s survival depends largely on the price rise of its own token rather than on  transaction fee earnings, it has to drive up the token price. In this regard, less experienced traders and retail investors can hardly have the upper hand in the trading competition with those crypto whales , especially the exchange whale.” Zhao said.

Despite the war of words between these two exchanges, FCoin has added BNB/USDT trading pair on June 21. The price of FCoin token rises from $0.01 to $1 within a month, and it is currently traded around $0.4, according to feixiaohao.

In less than a year after its ICO, Binance’s own token BNB has soared from 10 cents to $16 USD and turned its founder Zhao into a billionaire. And Binance sets example for other exchanges on how to maximize profit by issuing their own tokens. Major Chinese trading platforms, including Huobi, Okex, ZB, and FCoin, have followed Binance’s step to issue exchange tokens successively since the second half of 2017.