The Chinese cryptocurrency exchange platform FCoin announced the creation of a new investment fund to support a group of previously constituted token funds, selected to continue investing in blockchain technology projects. The capital for this support will come from the repurchase of its FT tokens on the secondary market.
The announcement, dated July 13th, states that the repurchase will be, in an initial phase, 100 million FT tokens. According to information published on FCoin official website, this operation is intended to encourage project fund participants to adopt FT tokens to raise financing capital.
To operate this parent fund, they will establish an “FT Trading Area,” which will be accessible to participants in projects that have managed to raise more than 3 million FT tokens from the fund. However, they noted that they would make further announcements later on on the relevant rules of the “FT Trading Area.”
FCoin cryptocurrency exchange has been the subject of several controversies since its launch last May
FCoin’s business model, where the cryptocurrency trading is, at the same time, used as mining, was questioned by the crypto community as not sustainable over time. Recently, the startup launched a competition to develop a ranking of accumulated deposits, which congested the Ethereum (ETH) network.
The recent significant increase in Ethereum’s fees was analyzed by a Reddit user, who pointed out that it was related to the competition launched by FCoin.
As the user stated in a publication two days ago, 40% of the network was being used by a contract for an ERC20 token called “IFishYunYu,” which has no features. However, a significant number of accounts he calls “mysterious” were sending massive amounts of this token, apparently to transfer individual tokens to the FCoin cryptocurrency exchange, which are distributed in different directions and then returned to the primary address.
That would have meant that in 24 hours around 50 ETH per hour would have been paid in fees.
The high volume of transactions in the Ethereum (ETH) blockchain, generated by the FCoin cryptocurrency exchange, are caused by the startup business model, as the ranking depends on the accumulation of deposits on the platform.