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Nearly 13000 BTC Cannot be Cashed, FCoin Triggers a Quite Stir in Chinese Crypto Space

On the evening of February 17, Zhang Jian, the founder of FCoin published a notice to explain the current situation and follow-up plans of Fcoin.

“The biggest problem Fcoin faces is that the fund reserve cannot be cashed out for users. We lack about 7000-13000 BTC (worth about 68.6 million-127 million dollars). The cause of the breakdown is not the invasion of hackers but the data error and decision-making error.”

On the day of FCoin’s breakdown, Zhang asked Leon Li, the founder of Huobi, for help to explore possible rescue measures, but failed.

Zhang declares that he will do his best to minimize the loss of users. At present, the e-mail withdrawals are all handled by Zhang himself, and it is expected that the current e-mail withdrawals handling will last for 2-3 months. Later, Zhang plans to compensate everyone with the profits of his new project. Any significant progress of the new project will be disclosed through open channels. Once the new project is on track, he will start the long-term process of e-mail withdrawal, which may last for 1-3 years. For losses of FT and FMEX investors, Zhang is willing to use the profits of new projects to compensate as well.

Zhang’s statement immediately triggered a quite stir in the Chinese crypto space as many investors have lost tens of millions of Chinese yuan in FCoin investment. Some of them are trying to save themselves, while some plan to report to safeguard rights.

“The total loss is close to 4 billion Chinse yuan, about 10000 BTC for financial management as well as FT, FM and FJ invested in FCoin.”

Yang Xing, an FCoin user told 8btc that he began to transfer more than 1 million Chinese yuan into FCoin after it was launched online. He is in a large group of FM users, currently, there are only more than 80 users. The top users hold more than 60 million FT, with a loss of nearly 100 million Chinse yuan. Users who lose more than 20 million Chinse yuan are the most common. Whether to save themselves or safeguard rights has become a dilemma for investors.

Some victims have called the police to safeguard rights, an anonymous “report material” began to spread in WeChat groups, it reads:

“On May 21, 2018, the crypto trading platform Fcoin.com (ifukang.com, fcoin.pro and other alternative domain names) operated by Zhang Jian and others went online under the state’s explicit prohibition, issuing its platform token FT (FCoin token) under the banner of “blockchain” and “digital currency” to disguise ICO. 10 kinds of cryptocurrencies, such as FJ, FI, FCANDY, ZIP, FT1808, FT1809, FT1908, FT1810, TengGuGU, QOS, FMEX have been successively issued to domestic investors. Some of them have been delisted, manipulated and fraudulently defrauded investors, causing hundreds of thousands of domestic investors to suffer at least billions of Chinese yuan of losses. The amount of fraud is especially huge.”

From the report materials, the victims believe that this is a fraud event and should be filed as a crime of fraud. However, Zhang said in his announcement that he will be responsible for the compensation, thus transforming the criminal cases into civil cases, not only reducing his own legal risk but also hinder the lawsuit of investors to safeguard their rights.

At the beginning of the bear market, FCoin created the myth of rapid rise through token incentives, but also suffer the consequences of token incentives adverse the market. Now FCoin is still accessible, and Zhang recently released “Instructions on Optimization of E-mail Withdrawal Process”, which changed the process of e-mail withdrawal.

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