Journalist: Kiki | Translator: Teresa Wang | Editor: April Cho
Why this is important:
FCoin was one of the first to launch a transaction fee mining model and became the world’s largest exchange in 15 days
Trans-fee (transaction fee) mining model incentivizes trading by “easily reducing the cost of trading: the tokens can be redeemed to cover the cost of commission or held until a later day”
FCoin has announced that it plans to begin its expansion into Japan
On October 24, Chinese cryptocurrency FCoin has announced the launch of its expansion into Japan as FCoinJP. FCoin plans to re-launch the trans-fee mining model that allowed the company to become the world’s largest exchange in 15 days.
As part of its launch, FCoinJP will issue platform tokens called the FJ. The FJ issuance will be capped at 10 billion, and 80% of FCoinJP's revenue will be allocated daily to FJ holders. The white paper specific to Fcoin’s Japanese expansion has been uploaded to unofficial website Fcoin-fan.jp.
The program leader for FCoinJP Summer Xie, a doctoral student studying artificial intelligence at the University of Tokyo, is a core member of the technology group. According to the announcement, Summer Xie has a proven expertise in the blockchain technology and in the Japanese market.
FCoin has become legendary among Asian cryptocurrency exchanges and in blockchain circles for launching the first transaction fee mining model: a 100% transaction fee paid by ETH and bitcoin is returned to the users as FT, FCoin’s platform token. Shortly after the launch, the trans-fee mining business model went viral.
As a result, FCoin became the world’s largest exchange by transaction volume in only 15 days. This new model challenged incumbent cryptocurrency exchanges and attracted the attention of investors. Japanese cryptocurrency media, Coinpost, has described FCoin as "a new trend in cryptocurrency exchange".
However, due to the bearish market in the blockchain industry, FTCoin has faced some public criticism,. This is particularly because FCoin's platform token had fallen sharply right after the value soared by a hundredfold. Compared with its peak price of $1.25, FT is now down by 97.27%. The company’s market value also shrank rapidly from more over $800 million to less than $100 million.
The launch of FCoinJP may become a turning point for FCoin after the dramatic decrease in popularity in China. However, whether the trans-fee mining model works and whether FCoinJP will be legalized under the Japanese government remain to be seen. As of yet, FCoin also has not yet received much attention in Japan. PANews checked multiple Japanese media outlets and found out that FCoin has not received much media coverage.
Compliance with Japanese regulations is a much more critical issue than whether FCoin has attracted media attention. Uncertainty about regulations on Japanese cryptocurrency exchanges remains strong. Currently, cryptocurrency exchanges are legalized through a case-by-case licensing system. Only a small number of licenses are issued.
Huobi and Binance both experienced legal issues when entering the Japanese markets. SBI, a Japanese financial giant that owns a licensed cryptocurrency exchange, terminated its cooperation with Huobi in March fearing crossing the country’s strict authorities. On July 2nd, Huobi’s Japanese website went offline and Huobi’s Japanese tweets and Facebook posts were deleted. Binance also received warnings from the Japanese Financial Services Agency because they failed to comply with registration policy.
Despite regulatory uncertainties and difficulties, neither Binance, Huobi nor FCoin have ceded the Japanese market. In September, Huobi acquired 100 percent equity of BitTrade, a registered Japanese cryptocurrency exchange. In July, Binance raised a donation of 150 million yen of ERC20 to local nonprofits for West Japan flood relief. This charitable act helped Binance to develop deeper connections with the Japanese market.
While FCoinJP's announcement did not mention any licensing issues, some questions remain to be seen: whether the trans-fee mining model can attract significant attention among Japanese investors? How will the Japanese Financial Services Agency react to the influx of cryptocurrency exchanges? The Japanese expansion of Chinese cryptocurrency exchanges remains uncertain.
