Right after the sudden closure of FCoin, AnChain.AI went a notch higher to get to the truth. According to the investigative report, the over $120m worth of bitcoin went missing through cold wallets.
Fcoin announced the shutdown on the 17th of this month. AnChain.AI, the company that took charge of getting the answers since then, came to a considerable conclusion as to where those bitcoins could have disappeared to.
Points brought to light; in 2018, FCoin was reported as the exchange with the highest trade volumes. To make them more trustworthy, they decided to make the ‘cold wallets’ transparent to the public.
The report was transparent as they said but how true it was is still not clear.
A few days before the CEO announced the shutdown, the website to the cold wallets shut off. All you could see is a message ‘FCoin System Upgrade Announcement’ something that happens due to data error.
They even announced on their official twitter handle on the problem:
CEO Zhang Jian, CEO FCoin, addresses the issue to be as a result of a ‘data error’. The statement could be true but there are facts saying otherwise:
“Ironically, on Feb 10, 2020, FCoin announced a system upgrade, followed by a series of strange withdrawal application announcements (a sign that the exchange may suffer from data loss issues). This announcement was made right before the Feb 13 cold wallet bitcoin withdrawal.”
where did all the bitcoin in cold wallets go?
Fcoin has recorded a massive transfer of bitcoin mainly to 4 major exchanges; Binance, OKex, Gate.io, and Huobi. Transaction according to reports seems normal but something changed in May 2019.
The transactions stagnated until august of the same year. After the few months with barely any transaction, enormous transactions to the four exchanges were recorded until the sudden closure of FCoin.
Since the ‘cold wallets’ were introduced there has been a total of about just about over 25,350 bitcoins transacted. Right now, about 13,000 BTC is missing and the platform cannot account for it. More than half the total transacted.
Whether this was a planned fraud scheme from the start or just another data error, money was lost. And, a very painful way to lose an asset.