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FCoin Exchange Shutdown: Technical Difficulties or Planned Scam?

The AnChain.AI team reconstructed FCoin’s Bitcoin on-chain exchange flow timeline based on the official cold wallet, and revealed interesting insights on their original 25,000 Bitcoin funds months before the FCoin shutdown announcement. Is FCoin facing technical difficulties, or is it executing a planned scam?

I. FCoin Shutdown Announcement

The crypto community was shocked by FCoin’s recent public statement regarding the shutdown. Not long ago, in late 2018, FCoin (based in China) was the №1 exchange by daily trading volume.

As stated by FCoin CEO Zhang Jian, they may not be able to pay back the 7,000–13,000 BTC (that’s $67 million to $125 million at time of writing) that it owes its users. FCoin announcement.


Figure 1 — On Feb 17, 2020, FCoin announced shutdown due to “internal problems and technical difficulties” per official channels. Link:


Figure 2 — Feb 10, 2020, FCoin (@FCoinOfficial, @FCoinEurope, @FCoinAsia) announced unscheduled “system upgrade” and “server maintenance” events.

II. FCoin’s Empty Cold Wallet

The crypto community tends to have a short memory. In late 2018, FCoin was the №1 exchange by daily trading volume. The FCoin whitepaper disrupted the crypto exchange business model by the introduction of their transaction dividend reward program, and by officially publishing their cold wallets for transparency.

Ironically, this FCoin transparency web page is under maintenance. But we can still find their announcement on : In June 2018, FCoin did, in fact, publicize their cold wallets for Bitcoin, USDT, and ETH.


Figure 3 — FCoin published their cold wallets in June 2018.

Upon brief examination of the cold wallet below, we observe that the last transaction was on Feb 13, 2020, and the previous one prior to that was on Oct 26, 2019, about 4 months ago, with nothing in between. This official FCoin cold wallet is empty. In total it has received and sent over 25,350 Bitcoins ( worth over $250 Million)


Figure 4 — FCoin’s — now empty — cold wallet’s on-chain transaction as of Feb 18, 2020.

Ironically, on Feb 10, 2020, FCoin announced a system upgrade, followed by a series of strange withdrawal application announcements (a sign that the exchange may suffer from data loss issues). This announcement was made right before the Feb 13 cold wallet bitcoin withdrawal.

III. Reconstructing the FCoin On-Chain Timeline

From the FCoin official cold wallet (12rU7whLERNrkDb8bTe9VJJSKZvCXy7dj7 ), the AnChain.AI BEI (Blockchain Ecosystem Intelligence) system is able to track the Bitcoin UTXO transaction flows and reconstruct the timeline. Our BEI Artificial Intelligence system analyzed over 210,000 related transactions and revealed patterns of unusual activity among FCoin’s 40,000 wallet addresses in their exchange wallet infrastructure.

We performed 2 quick investigations on 2-hop and 3-hop exchange flows.

In 2 hops from the cold wallet, the Bitcoin flowed into 4 exchanges : OKEx, Huobi, and Binance. Activity stagnated through May — August 2019, andspiked suddenly in September 2019, 5 prior to the FCoin shutdown announcement.


Figure 5 — Two-hop exchange flow timeline, constructed by BEI.

By expanding the investigation to 3 hops of UTXO transaction flow, the fund reached 11 exchanges potentially relevant to suspected FCoin cashout activities. OKEx received the majority of the funds, followed by Binance, Huobi, Bithumb, Poloniex, Bitfinex,, ZB, Bitflyer and Upbit.


Figure 6 — Three-hop exchange flow timeline, constructed by AnChain.AI BEI.


Figure 7 — Fcoin cold wallet flow graph. Color encodes the distance from the original Fcoin cold wallets.

Again, the timeline demonstrates a clear uptick of activity during September 2019, peaking in January 2020, immediately before the FCoin shutdown announcement.

So, was the FCoin Exchange Shutdown due to technical difficulties, or the culmination of a planned scam? Only the FCoin team would know for sure.

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