FCoin, a new cryptocurrency exchange that saw spiking trading volume recently due to its controversial revenue model, has revealed a plan to buy back millions of its own tokens to provide capital for a new fund of funds.
The exchange announced last Friday that the new fund will be backing a group of selected token funds to further invest in blockchain and cryptocurrency projects. The funds selected will all be accredited sponsors, it added.
During an initial phase, it will allocate 100 million of its own FT tokens – worth around $24 million at press time – to fund the project. However, instead of providing the amount from its own reserves, FCoin said the the capital will come from a buyback of tokens on the secondary market.
The move accompanies FCoin's addition of a new "FT trading zone," also announced on Friday, which includes trading pairs between FT and other tokens.
FCoin stated that only projects that have raised over 3 million FT through the fund of funds and have been recommended by at least two sponsors will be eligible for listing in the new trading section.
As previously reported by CoinDesk, FCoin saw soaring trading volumes after launch due to the adoption of a new business model called "trans-fee mining," which reimburses users' transaction fees with the exchange's FT tokens.
While the model has drawn industry criticism over its long-term sustainability, CoinMarketCap data shows the platform recorded some $3.8 billion in trading volume over the last 24 hours.
That said, FCoin's plan to buy back its tokens from the secondary market also follows a continuous decline in the price of the FT token, which has plunged by around 80 percent over a month, from $1.25 on June 13 to around $0.24 at press time.
Coins image via Shutterstock
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
Binance Secures New Funding From Vertex Ventures
Correction: This article has been corrected to note that Temasek Holdings did not play a role in the investment, as was initially reported. Vertex Ventures is a limited partner with Temasek.
Bitfinex Is Publishing Data for a Tether Market That Doesn't Exist
Pop over to CoinMarketCap and check Bitfinex's page.
You'll see that the trading pair with the second-highest volume on the exchange over the past 24 hours – nearly $48 million at the time of writi
Coinbase Approved to Offer Crypto Custody Services in New York
Coinbase has received approval from New York regulators to form a qualified custodial firm for cryptocurrencies.
The New York Department of Financial Services (NYDFS) said Tuesday that it granted C
Elon Musk Sparks Speculation With Cryptic Crypto Tweet
Elon Musk, the founder of SpaceX and Tesla, just made a mysterious tweet about bitcoin that's whipping up speculation across social media and the cryptocurrency community that it may be more than just
Coinbase Adds Its First Stablecoin Tied to the US Dollar
Crypto exchange Coinbase announced support for the Circle-issued stablecoin Tuesday.
In a blog post, the exchange said U.S. customers outside the state of New York can now buy, sell, send and recei
Australian Government Agency Says Blockchain 'Interesting' But Hyped
The Australian government agency dedicated to streamlining the country's IT operations has called blockchain "interesting," but said it is hyped by firms working with the tech.
The chief digital of
Japan's SBI Group Is Building a New Crypto Exchange Wallet
Japanese financial services giant SBI Group has partnered with a blockchain security startup to develop a digital wallet for its recently launched cryptorrency exchange.
The Denmark-based startup,
New SEC Commissioner Briefed on Bitcoin ETF in October Meeting
The newest commissioner with the U.S. Securities and Exchange Commission met with representatives from money manager VanEck and blockchain startup SolidX earlier this month to discuss a bitcoin-based