Investors ask two core questions after FCoin Zhang Jian's "truth"

"Silence is the greatest immorality."

On February 14, 2020, in FTFan, a multilingual forum open to FCoin users and loyal fans, someone typed such a sentence as a way to vent their frustration and indignation that the FCoin official team has been out of contact for many days.

A few days ago, almost everyone did not know what was going on inside FCoin. Until the afternoon of the 17th, some people still asked on the forum: "Really running away?" Bad news fermented for several days, everyone There is still a trace of luck.

The matter is far worse than expected. On February 17th, six days after FCoin went out of business, Zhang Jian announced the truth on the official website, stating that due to data errors and decision errors, the platform ’s current funds are difficult, and the amount of funds that cannot be paid is estimated to be 7000. -13000 BTC (480-890 million yuan).

• Babbitt Weekly Selection 丨 A DeFi crisis triggered by a new species of "lightning loan"; Blockchain + Epidemic application opens the door to blockchain social governance
• FCoin thunders, Zhang Jian confesses that over 900 million yuan cannot be paid, and foreign exchanges have significant financial risks
• How to achieve effective supervision through distributed key technology?

Zhang Jian, who used to be upset

In other words, the former "Cosmic First Trading Platform" declared its collapse and the remaining redemption problems were very serious.

In the past year or so, FCoin claimed to have handed over the platform to the community, and also proposed a so-called community committee (social committee), working group, and volunteer three-tier structure, of which there are as many as 10 working group classifications, as founders Zhang Jian, indeed, is gradually diluting his role and making decisions to return to the community. This approach seems more democratic and fair, but it also buried the early "landmines", and now it finally burst.

The number of affected people is huge, and the hundreds of millions of assets belonging to users are wiped out. How many assets can users get back? Beyond The Truth, FCoin and Zhang Jian also need to answer the two core questions that investors are most concerned about as soon as possible.

FCoin thunderstorm, hundreds of millions of deficits

In this FCoin storm that has lasted for almost a week, what concerns users most is their own asset security issues.

According to the latest FCoin announcement, in addition to the problem that the system cannot be restored, another more difficult problem is that the capital reserve cannot be cashed by users. "The internal problems and technical difficulties we face are the result of financial difficulties. It is expected that the cash cannot be paid. The scale is between 7000-13000 BTC. "In other words, the platform's money is not enough to meet the user's normal withdrawal needs, and there is a so-called thunderstorm.

According to the announcement, the platform currently has only one person, Zhang Jian, who is processing e-mail withdrawals, and the efficiency is low. It is expected that the e-mail withdrawal processing will last 2-3 months. With regard to the problem of insufficient funds to withdraw, the operating staff stated that the principle of allowing as many users as possible to withdraw should be handled to minimize the number of people affected.

This also made FCoin the first cryptocurrency trading platform that could not be redeemed due to the failure of the team's decision. Previously, platforms that were unable to pay and closed were mostly hacked, funds stolen, or violated regulations, and even various black swan incidents (such as the accidental death of the founder, loss of private keys, etc.).

Screenshot source: FT Forum

According to Zhang Jian's own description, the tragedy of FCoin has been foreshadowed in the second half of 2018.

He recalled in the announcement that the cause of the unfulfillable event was data errors and decision errors, that is, the back-end financial system that had not been established at the beginning of 2018-FCoin went online for 1 year before the team went online. The financial system (it can be understood that it was completely streaking before), and the long-term decline and communityization of subsequent FTs were once the major strategic direction of FCoin. Eventually, they accumulated over time, the capital holes became larger, and the risks became greater.

From the earliest spot trading platform FCoin, which mainly focuses on "transaction is mining," to overseas stations FCoinJP, and even derivatives trading platforms FMEX, and FOne, FFUND, BCoin and other concepts, Zhang Jian's team has tried many times to try to save FCoin in danger It ended in failure.

How many assets can users get back?

Various self-rescue failures have been declared one after another. Zhang Jian did not think of asking for foreign aid. According to his self-report, after the crisis on February 10, he called Li Lin, who had not contacted for two years, to discuss possible rescue. Plan, but the result was exactly the same as he expected: Huobi could not sell.

The road of foreign aid was blocked, FCoin was weak, and Zhang Jian chose to announce the "truth."

The event has been concluded, and it is not important to discuss how to fail, but for investors who put a lot of assets into it, the most concerned question is, how much assets does the platform / Zhang Jian have and how much loss can they get back?

On February 15th, the data of the transparent digital asset ranking of the BitUniverse currency trading platform showed that the hot wallet belonging to FCoin had 8.587 million US dollars (approximately 60 million yuan) of assets (661.1 BTC, 622.773 ETH, 22,100 USDT), and According to today's announcement, Zhang Jian said that the expected scale of unpayable is between 7000-13000 BTC, which is equivalent to 480-890 million yuan in legal currency, which is far from the assets in hot wallets.

How will this part of the user's assets be returned to the user?

Five days ago, on February 12th, FCoin issued an announcement to open the operation of mail application for withdrawal to users, but then, in the various rights protection groups, only a very small number of users were partially received. And most of the information that came out was information that could not be withdrawn, only received confirmation, but could not be received.

Earlier, a user nicknamed "Iron Head Big Bun" was the first to withdraw cash successfully, which caused widespread concern. He told the block rhythm BlockBeats, in fact, he submitted two withdrawal applications at the time, and only the ETH withdrawal of the currency trading account was successful. (Forty dozen), another USDT for financial management (amount of several hundreds of thousands), has not been successfully withdrawn until 8 pm on February 17th.

In the announcement on the 17th, "I am currently processing all mail withdrawals, so the efficiency is very low." According to Zhang Jian, the current mail withdrawal processing is divided into two stages, the current stage and the long-term stage. Withdrawal processing in the first phase will last 2-3 months. "Because the current assets are not enough to pay users, I will deal with the principle of allowing as many users to withdraw as possible to minimize the number of people affected."

This means that the majority of users can only get back some of their assets, and the proportion has not been disclosed. However, Zhang Jian said that he would try his best to speed up the process and release the relevant data after the processing. In particular, he mentioned, "It is difficult to discuss the issue of fairness, and no one should ask for trust."

"All decisions are made by me alone, and I can't blame others." Does this mean that the huge assets that have not been redeemed can only wait for Zhang Jian to return?

Regarding the part that cannot be honored, Zhang Jian said that in the future, the track will be replaced and restarted. The profit of the new project will be used to compensate everyone's losses. Once the new project is on track, the long-term mail withdrawal process will begin. This process may continue. 1-3 years. "Responsible for the end of your life."

In addition to the small and medium investors who want to cry without tears, a netizen named "Blockchain Qiao Bangzhu" published a list of large FCoin tokens in a Weibo posted in September last year. Among them, except the FCoin Fund , The team and the platform, including Danhua Capital, Consensus Lab, FFund, Origin Capital, Zipper Foundation, Timestamp Capital, Node Capital, Boom Capital, Singer Capital, Eight-Dimension Capital, etc. Currency institutions, most of which locked positions until June 2021, if there is no accident in the second half of the year, these institutions will basically not cash out.

One of the early investors told BlockBeats that such redemption incidents are "difficult to handle" because the FCoin platform's redemption problem has been around for a long time, and it happened last year. They used to have some assets in their FCoin account, but they failed to withdraw cash. "But this time in FCoin, the institution should discuss a specific solution with Zhang Jian. The money must be paid back. What do you see? The same way. "

At the same time, he also said that in his opinion, Zhang Jianfa's announcement to clarify the issue did reduce legal risks. More relevant people were silent and would not comment on this.

Beyond Truth, FCoin needs to respond to two core issues

As early as the second half of 2018, FCoin began to turn to community. Decision-making is democratic, but users also feel that the team is becoming more mysterious and less exposed. "Thinking about this is very deadly." Someone on FTFan Leave a message because the assets are still in the hands of a few team members.

The FCoin crash is the end that no investor thought of, because on January 20th before the Spring Festival this year, FCoin also successfully carried out the record of the 60th community question and answer session. The community question and answer started as early as October 2018, once a week. It is almost wind and rain, and judging from the question and answer situation, although the problems exposed by FCoin are heavy, the operation is still normal, and there is no obvious payment crisis.

Zhang Jian's Outlook for the New Year 2020: "The revolution has not yet succeeded, comrades still need to work hard!"

This also caused that after the release of the latest announcements in February, the official staff would be completely "lost", and all official members (whether it was Dean responsible for Q & A, FT ecological leader, or public relations) would have left the relationship formed. In stark contrast, because there is no official response, users will only be more panic and rumors will intensify. After nearly a week of worry, they finally waited for the cruel truth of the founder.

In this announcement, Zhang Jian explained the origin of the huge crisis facing FCoin, the huge holes caused by the failure of decision-making, and simple countermeasures. However, in addition to this paper announcement, many mysteries about the FCoin team and Zhang Jian remain to be seen. Untied: For example, as a platform that claims to be “delivered to the community”, has the team involved long-term concealment and asset transfers in the past year?

Because whether it is the subsequent launch of FCoinJP, high-interest wealth management, and various financial products and platforms, the team did not disclose any risk of redemption to the outside world; in November last year, under the contact of Carrie Yang, the head of FT ecology at the time, Zhang Jian also accepted an interview with the Financial Times, and still created a safe and sound "fake" to the outside world through the mainstream media, which continued to confuse users until February this year.

In addition, it was announced on February 10 that it would destroy more than 700 million platform coins held by the team and affect the FT price of the secondary market.

However, the most important thing for users at the moment is: I hope Zhang Jian and his team will publish the specific assets of all hot and cold wallets on the platform as soon as possible, and if possible, let third-party agencies intervene and investigate thoroughly. In addition, I hope the team will announce specific redemption rules and which users How much assets can be retrieved, how to return and dispose of the unpayable part, and ensure that the redemption process is open and transparent.

The fog surrounding FCoin has not yet dissipated. As the first platform crash in the beginning of the year, involving many users, market makers and funds, this storm will inevitably have a significant impact on the crypto market that has just recovered.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!