FCoin to buy back native tokens worth $24 million for new fund
Chinese cryptocurrency exchange FCoin on Friday said it would buy back millions of its native FT tokens in order to raise capital for a new fund it plans to set up. Capital from FCoin’s new fund will be used to further invest in blockchain and cryptocurrency projects and the funds selected will all be accredited sponsors.
The exchange will initially allocate 100 million FT, worth $24 million, to fund the project. However, these tokens will not be from the exchange’s reserves. The exchange will buy back these tokens on the secondary market and then allocate them to the new fund.
Currently, there are 2.51 billion FT tokens according to CoinMarketCap, but it was not immediately clear as to how many coins are in circulation at present.
FCoin also launched the FT trading zone, which includes trading pairs between FT and other coins. It pointed out that only project that have raised more than 3 million FT and have been recommended by at least two sponsors will be eligible to list in the new trading zone.
FCoin battles mounting criticism over revenue model
The trading platform has attracted a lot of criticism for its revenue model in recent days. The trans-fee mining model involves exchanges issuing their own native tokens as a reward for trading. This reduces the cost of trading since the coins can be redeemed to cover commission expenses or held in reserve for a later time.
Its transaction mining model has been the main reason why the exchange has seen incredible volumes being traded on its platform in recent days. At the time of writing, the exchange had attained trading volume of over $2.3 billion in 24 hours.
However, not everyone is supportive of this revenue model. Binance founder and CEO Changpeng Zhao has accused FCoin of taking advantage of its users through this model. He added that FCoin could not be compared to Binance despite its great market performance, as the former was involved in a volume fraud.
FCoin is already battling criticism for reportedly being the reason behind a series of Sybil attacks that congested the Ethereum Network recently.
Image via Shutterstock
Join our Telegram group