A cryptocurrency exchange has revealed plans to buy back millions of its own tokens in an effort to boost its capital for future funding.
FCoin announced on Friday that it will make the move to enable further investment in blockchain and cryptocurrency projects, with funds accredited to sponsors. It will allocate 100 million of its FT tokens to initially put behind the project.
The twist is that these tokens will come from those bought back on the secondary market.
The 100 million tokens are worth about $24 million. Only projects that have raised over 3 million FT tokens and have at least two sponsors will be listed in the new trading section – also launched on Friday.
FCoin did well on launch because of its ‘trans-fee mining’ business model, which reimbursed transaction fees to users with FT tokens, but has since seen a huge 80 per cent decline in the last month alone.
This is just the latest decision from the firm that could attract criticism, with some comparing it to a “ponzi scheme” and questioning its methods of raising volumes.