Exchange managed to lose 7000- 13000 BTC in Non Payment?(BTC downtrend reason?)

[vennali]

So, an exchange called FCoin came clear that they are unable to pay its users upto 13000 BTC of non-payment. They came clear on a reddit post here. They claim that their exchange wasnt hacked, nor and internal volume run but it was a data error and a decision error. How are these exchanges losing investors/customers money like that and that too at such crazy amounts?

[rosezionjohn]

Such bs story, he should have gone straight to the point without being overly dramatic to look pitiful. They were unprepared and undermanned from the very start and rushed the launching of their platform. This is what happens when you chase them profits. Greed made them continue despite knowing the mining issues early on.

[jackg]

I hadn't heard of that exchange, why would they be trusted with 13K btc?

I'm guessing they're not acutally that big and trusted when compared with coinbase or the others (bitfinex, bitstamp etc)... So it probably won't have much of an impact on the price...

And why would you come clean on a massive post on reddit, everything just says they probably scammed or wanted something else from it.

[exstasie]

So, an exchange called FCoin came clear that they are unable to pay its users upto 13000 BTC of non-payment. They came clear on a reddit post here. They claim that their exchange wasnt hacked, nor and internal volume run but it was a data error and a decision error. How are these exchanges losing investors/customers money like that and that too at such crazy amounts?

It sounds like they erroneously calculated/credited dividends, and allowed people to trade and withdraw that money. This lead to insolvency beginning in mid-2018:

As a result, a large number of users have already been through operations such as buying and selling various currencies and withdrawing cash, causing The "pollution" of assets. Because the amount and amount of daily dividends were very huge at that time, it was already hard to ensure the normal operation of the system, and then we were unable to continue to thoroughly investigate and locate the actual loss. We can only roughly estimate and plan for future processing. At that time, it was estimated that the loss was equivalent to 10-20 million US dollars, which is completely affordable in our body.

The whole thing is apparently irreparable because the operating team was reinvesting all their company/personal money into the native token, which essentially became a toxic asset:

If no data is wrong, at most it is the personal wealth of our team. However, after adding this factor, the result is that we used "polluted" dividend income (both our real money and "multiple" dividends) to buy back FT that may also be "polluted" (In the case of multiple returns), help others to real cash.

And why would you come clean on a massive post on reddit, everything just says they probably scammed or wanted something else from it.

Certainly could be an exit scam, yup.

[milewilda]

Quoting some final words. lol

Final words

"The unselfish beginning will bring disastrous consequences; the greed of human nature is the motive force for the advancement of society."

Things in the world are so ironic. After seeing too many greedy people, I was able to fill them up, and did not forget to call you a silly X. However, I was determined to achieve my career without fear of sacrificing all my wealth, but ended up in the name of a runaway.

Responsible for the end of your life.

To make this story short. This is just indeed an exit scam and all things written are just pure BS alibis.

[vennali]

I hadn't heard of that exchange, why would they be trusted with 13K btc?

I'm guessing they're not acutally that big and trusted when compared with coinbase or the others (bitfinex, bitstamp etc)... So it probably won't have much of an impact on the price...

And why would you come clean on a massive post on reddit, everything just says they probably scammed or wanted something else from it.

I hadn't heard of them either. They were big in China apparently (at least that's what the volume suggests). Not known to the world outside. I really dont know what to think of it though. Complete mismanagement of funds.

[tmfp]

Trans-fee mining was essentially a covert ICO scheme by Fcoin.
By supporting their intrinsically valueless token's price with "real" money and being too full of hubris to do their sums properly, they Ponzi'd themselves; quite funny really.

[joniboini]

If the owner can run away with this, then it will be pretty bad. On top of that, some news said he's going to 'switch track' and hope to be able to pay back from the new business profits. That's like saying, 'Hey I stole your money, but don't worry I'll pay you back when I scam others'.

[abel1337]

If the owner can run away with this, then it will be pretty bad. On top of that, some news said he's going to 'switch track' and hope to be able to pay back from the new business profits. That's like saying, 'Hey I stole your money, but don't worry I'll pay you back when I scam others'.

Basically the owner is going for an exit scam and won't pay the recent victims, Opening a new business to get profit but it's hard to trust that because of the owner lost its trust from the market and it can basically go on bankrupt on the other way.

The victims' combined assets is too large to make a bankrupt exchange to pay up the loss. They should at least payout some of their users slowly.

This would likely turn into scam 

[pooya87]

just like about 70 other exchanges before, they are also lying to cover up their scam. this is actually becoming a popular way for small exchanges to close up shop with a good profit in the end. they first start a business (exchange) then fail to make ends meet then they have to rob their small number of users to be able to shut it down and be left with some money.

as for the other question nobody seems to address, there is no "bitcoin downtrend". a downtrend would have been if price went down to $8k at least not a tiny drop just below $10k which is perfectly normal.

[TheBeardedBaby]

There should be some kind of regulation, everyone can create an exchange and then just steal the funds, like what we see here.
We are taking here about 125 000 000$ with the current exchange rate, and this is considered a small exchange. As much as I hate regulations, there should be some kind of order, otherwise people will continue to distrust the bitcoin (and crypto in general) and we are riding away from the mass adoption.

[NeuroticFish]

There should be some kind of regulation, everyone can create an exchange and then just steal the funds, like what we see here.

There's quite a contradiction. Regulations, among other things (including the fact the owners may be prosecuted for theft) bring the so much hated KYC (so the prosecutors get to know which individuals the funds are stolen from).
Don't take me wrong, I am pro-regulations for companies, but it's hard (actually impossible) to keep everybody happy.

[tmfp]

There should be some kind of regulation, everyone can create an exchange and then just steal the funds, like what we see here.
We are taking here about 125 000 000$ with the current exchange rate, and this is considered a small exchange. As much as I hate regulations, there should be some kind of order, otherwise people will continue to distrust the bitcoin (and crypto in general) and we are riding away from the mass adoption.

This isn't crypto, this is just a gambling mechanism that has been constructed around the use of tokens.
As a so-called "scam buster" I am reluctant to victim blame, but are there any real victims here?
To my eyes transaction fee mining is just a modernized version of the dead end HYIP industry, another example of complicit grifting: there was no need to use that exchange for bona fide reasons. Similar to the "Investbox" bullshit.

[xiver88]

Funds started to move from the exchange's cold wallet. Another reason for the possible dump is selling off by another scam PLUSTOKEN. OKEx and Huobi are 2 exchanges used to sell massive btc and eth.

[Wexnident]

It amazes me how people can spout absolute BS, and in such a long and roundabout way as well. I imagined them typing it out without even batting an eye from the reasons they gave. They made a mistake and failed to adapt to the users needs and wants, and failed to limit whatever they should have. They already failed as a company tbh, but as a way to make a quick buck? I'd guess they already achieved as such.

Also, we lost about $500 in BTC price, not enough to be called a downtrend tbh. Probably a correction would be a better term? We have seen how BTC has continuously risen for the past weeks after all. Might have corrected itself for now and would show a sideways movement for a few weeks before pushing ahead again.

[sheenshane]

Eventually, this kind of scenario was probably going to exit scam. They are based on China and usually, people there have a potential of big-time investors that might be a good amount to run. But let's not accuse them quickly, there are too many various reasons why they are unable to pay their users in a big amount. Sounds like a Ponzi scheme waiting for their pool fund becomes big and scams many users.

f you know how works pyramid scheme they act like that, they want increased the fund from investors and didn't allow members to withdraw a big amount, probably they will run when it was full.

[TheBeardedBaby]

There should be some kind of regulation, everyone can create an exchange and then just steal the funds, like what we see here.

There's quite a contradiction. Regulations, among other things (including the fact the owners may be prosecuted for theft) bring the so much hated KYC (so the prosecutors get to know which individuals the funds are stolen from).
Don't take me wrong, I am pro-regulations for companies, but it's hard (actually impossible) to keep everybody happy.

The problem is that all the regulations and KFC ( i mean KYC) are turning the exchanges into a bank institutions,the government have overview of what you possess and still can turn you down if they want so.
And we all go back to the good old trust. Mt.Gox was also trusted exchange but see what happened, people never believe it will happen to them. Binance was hacked but they manage to recover, so they build more trust but you never know. Same for me, I don't know what I can expect from Coinbase, I never had any issues with them, but this does not guarantee that they are honest and won't still my funds there, that's why I keep only those I'm feeling "OK" (if you can every feel ok for such things but) to risk.

[NeuroticFish]

And we all go back to the good old trust.

Heh, as long as some exchanges still operate after not giving back user funds after hack, inside job or whatever,
as long as people still keep massive amounts of coins in the exchanges instead of their own wallets,
as long as exchanges still have customers after fishy behavior (see Kraken users getting strange hacks with multiple levels of 2FA on, see Yobit token machine).. the trust seem to be .. unnecessary.

I guess that we deserve our fate, really. And sorry, but exchanges are supposed to be financial (not banking, but not too far) institutions after all, since we talk here about coins and tokens with real value (at least some of them), not Monopoly money.

[vennali]

There was another report suggesting that Fcoin's BTC were transferred to other exchanges.

So, yeah. There's that figured out on where the BTC went.
Source

[exstasie]

There was another report suggesting that Fcoin's BTC were transferred to other exchanges.

So, yeah. There's that figured out on where the BTC went.
Source

That was quick. Exit scam confirmed!

The verification and withdrawal processes all require manual processing, so the processing speed is relatively slow. In addition, there are more people applying at the same time, so please wait patiently after submitting your application.
https://fcoin.zendesk.com/hc/en-us/articles/360042843754-Announcement-on-the-start-of-processing-withdrawal-applications

If you're still waiting on a manual withdrawal at this point, you're screwed. The money is gone. I guess the whole "polluted assets" story was just a ploy to give the operators time to disappear.