Crypto Exchange FCoin Insolvent After Revealing Up to $130M Bitcoin Shortfall

FCoin, a crypto exchange that adopted the controversial “trans-fee mining” model, has paused trading and withdrawal as it reveals a shortage of crypto assets worth up to $130 million.

Zhang Jian, the former Huobi CTO who launched FCoin in May 2018, wrote a lengthy post on Monday, saying the exchange is now unable to process users’ withdrawal demands as its asset reserve has fallen short of its liability – and the gap is estimated to be about 7,000 to 13,000 bitcoin.

The post, first published in Chinese and later translated on Reddit, comes as a shocking notice to users in China as the significant amount of assets in question led to the insolvency of the controversial model that at one point made FCoin one of the largest exchanges by trading volume.

Zhang claimed in the post that the exchange was neither hacked nor an exit scam but the problem is “a little too complicated to be explained in a single sentence.”

In summary, he said the issue came from internal system errors that have…