A big announcement by FCoin is rocking the crypto world. Crypto exchange FCoin has just announced that between 7,000 and 13,000 BTC cannot be recovered. The China-based cryptocurrency exchange says that the problem is neither a hack or an internal volume overrun. Rather it is a data error and a decision error. Clients stand to lose over $70,000,000.
FCoin Decision Error?
FCoin was launched in 2018. In the same year, the exchange was already under fire. At the time, the exchange was accused of inflating its trading volume. In one particular instance, the exchange posted a daily trading volume of over $5.4B which was more than the top ten largest exchanges combined.
Despite the problems, the exchange continued to be popular with its unique business model that touted turning cryptocurrency trading into mining.
Now the exchange has taken it to a new kind of level. Effectively seeing millions lost and crypto investors’ trust in the exchange’s lost.
In a post written by the exchange CEO and former Huobi executive, Jhang Jian, he notes;
“The biggest problem that FCoin currently faces is not the problem that the system cannot be restored, but the problem that the capital reserve cannot be paid by users. The internal problems and technical difficulties we face are the results of financial difficulties. It is expected that the scale of non-payment is between 7000-13000 BTC.”
The CEO continues to explain why the same has taken place noting the reason;
“It is neither an external hacking or an internal volume run, but a data error + a decision error. This is a problem that is a little too complicated to be explained in a single sentence…”
The story is long as the writer warns, with twists and turns. But basically drives at the fact that users should begin counting their losses.
Most users will remain unconvinced by the CEO and will suspect that this was a ploy to steal from them.
This is why it is important for exchanges to prove their assets under custody (AUC). https://t.co/Hn4myET430
— ViewBase (@viewbasecom) February 17, 2020
This has the potential to see an already struggling market further plummet as investors panic and withdraw their assets from small exchanges. For investors who have lost, the community hopes that there will be some legal action in the days to come.