(NUMBER 5)

If you've been into Crypto for anything more than 3 months, then you've probably experienced at least one form of scam. From the scam money doublers who ask you to send a coin and they will double it, to the ones who ask you to send gas fee to get a coin, to scam projects, or even scam exchanges, they abound aplenty especially in a Crypto sphere that is largely unregulated. For the context of this series, a scam will be defined as a swindle in which the mark, or victims, are defrauded after their trust has been won. This series will go from the least to the greatest (in my opinion), so let's get right into it shall we. Here goes:

5) FCoin:

Let's go back a bit and understand what FCoin really is before we find out how they scammed. FCoin was launched in May of 2018, and they came with one of the sweetest incentives I have ever seen (to win your trust). FCoin came and said they would be using the highly controversial “trans-fee mining” model. Rather than organize ICO or even start an airdrop, the exchange simply gave out a whopping 51% of its tokens to users for doing something as simple as carrying out transactions on its platform. Your guess is as good as mine about the outcome, and in under one month by June 2018, reports showed that the daily trading volumes on the platform was over $5.6 billion (absolutely crazy right). So for every transaction fee paid, the exchange will do a 100 percent refund in FTs. Also giving out 80 percent of the transaction fees as rewards to users for holding FTs bitcoin for 24 hours. If your transaction fee was $5, you got it back 100% in FT, and you also got rewarded for holding FT Bitcoin. So basically whether you were winning or losing your trade you were gaining FTokens. Their founder was reported to one time have said his plan was better than Bitcoin (are you finally starting to doubt). In hindsight we should have known better when the CEO of Binance, Changpeng Zhao, called them out in a tweet as a pyramid scheme. Many just said it was because they were his competition (make no mistake CZ is no Saint), and overlooked the warning signs. CZ had this to say:

“I rarely called out anyone, with exceptions. On Chinese social media, I called FCoin a pyramid scheme in mid-2018. Their founder calls his own plan a “better invention than #Bitcoin”. That did it for me. Who would say such a thing about themselves? Except scammers,”

The mining model worked beautifully for a while and many who were gaining began feeling like the smartest people on Earth, then the cracks began to happen. The system model began to overpay users and traders their mining rewards and this problem (reportedly) went unnoticed by the FCoin team until mid-2019. When they finally realised the problem, the founder of FCoin Zhang Jian, a former CTO at Huobi, made a very big 'error'. He decided to buy back FTs from the market. But since some users were still receiving their FT dividends, the buyback simply continued to drain the company of its funds.Then on the 17th of February 2020, the exchange announced that it was suspending all trading and withdrawal services on the platform (classic exit strategy), and cut users access to their funds. Many reports claim that the exchange could be in debt of about 13,000 Bitcoin estimated to be worth over $125 million.

While the founder continues to maintain that the exchange challenges were not an exit scam, I can't help but wonder how they intend to pay back the deficit owed to users. He also added that the situation was “a little too complicated to be explained in a single sentence" (there goes your money guys). While we can never be sure if the users will get their money back, it is sad to know that many who trusted their life savings on an exchange might never get it back. With a debt of over $125 million, FCoin definitely makes it to my list of greatest scams and is seated on number 5 spot. Who will be on number 4 spot, we wait and see.