The FCoin exchange has officially appear that it will relaunch operations. A committee was formed after the exchange appear insolvency, promising to eventually return users' funds.

The exchange'southward existing team will resume the operation of the FCoin and FMex websites, handing them over to an "interim commission" led past community representatives. The declaration was made on Feb. 27 on FCoin'due south support page.

The customs volition draft a compensation plan for the users affected by the insolvency. No details are available, with the announcement suggesting that it could exist a mix of creditor's rights or company disinterestedness.

Finally, after the payment plan is complete, the exchange's buying will supposedly be handed over to the community. No concrete launch dates were announced though.

Exit scam allegations

The FCoin debacle was seen by many in the crypto community equally an endeavor to perform an exit scam.

The substitution'south founder, Zhang Jian, motivated the loss with "poor auditing" and "fiscal difficulties." Every bit Cointelegraph reported, the exchange used a peculiar "trans-fee mining" model where users were fully compensated for their trading fees with the platform'due south native token.

As the price of the token plunged later in 2022, Jian claimed that the exchange used its own resources to prop up its price. Those alleged attempts proved to be unsuccessful.

Critics point to peculiar withdrawal patterns on the blockchain to brand the exit scam argument. Blockchain analysts debate that the exchange'southward wallet made regular transfers of 100 and 150 Bitcoins (BTC) to other exchanges, such every bit Huobi. Dovey Wan, a founding partner of Primitive Crypto, argued that even the regularity of the amounts by itself is suspicious.

Volition FCoin make users whole?

The exchange is currently allowing manual withdrawals for some users who perform the relevant procedures on a dedicated website. Jian is seemingly reviewing the requests manually.

By FCoin's ain estimates, the insolvency amounts to seven,000 to xiii,000 BTC, or $61 million to $115 million at press time. Information technology is difficult to expect that users would be willing to merchandise on the exchange given its tarnished reputation. Repaying such large amounts might thus exist unfeasible.

The situation draws some parallels to the Wex.nz substitution, which was launched in September 2022 in response to the shutdown of the BTC-e exchange by authorities. BTC-eastward's alleged founder, Alexander Vinnik, was also arrested as part of the operation.

The "new" exchange was merely able to recover 55% of users' funds, first a user repayment scheme based on an "I owe you" token. Approximately one year afterwards, the substitution froze withdrawals and was blacklisted by Binance. Its founder was arrested by Italian regime in 2022.

With some legal experts arguing that FCoin is a thinly-disguised Ponzi scheme, in addition to China'southward witch hunt against cryptocurrency exchanges, its founder may find himself in legal troubles as well.