New Crypto Exchange, Bitex, Launched in United Arab Emirates (UAE)

Digital asset exchange, Bitex, has officially launched in the United Arab Emirates (UAE). The new crypto trading platform will support bitcoin (BTC), bitcoin cash (BCH), ether (ETH), and litecoin (LTC).

Bitex Ramping Up

Bitex’s management team has also released a new crypto wallet that provides a cash deposit service. Monark Modi, the CEO of Bitex’s UAE branch, said the exchange will offer many different payment options - such as bank wires, and credit or debit cards.

Modi explained that Bitex’s cash deposit service lets users transfer funds directly to their exchange accounts, so that they may be available for use on the platform within 24 hours.

Commenting on UAE’s progressive regulatory framework, Modi noted: “Recent changes in UAE regulation have made today the perfect time to seize the opportunity to introduce a new, secure, professional trading platform.”

As CryptoGlobe reported, Dubai, the UAE’s financial hub, is planning to conduct 50% of its transactions on blockchain-based networks - as part of the country’s Blockchain Strategy 2021.

One of the main objectives of the nationwide initiative is to establish “the groundwork for digital assets becoming more accessible” in the UAE.ming more accessible” in the Gulf state.

Emphasizing the importance of security on cryptoasset trading platforms, Modi said: “UAE residents have been calling out for more options to securely buy and sell digital currencies … while residents have been able to use international trading platforms for some time, having access to a local exchange is far more convenient. Trading via a UAE-based company allows customers to easily deposit local currency rather than first having to exchange it for a more widely-accepted currency.”

In June, Abu Dhabi’s (UAE’s capital city) regulator, the Financial Services Regulatory Authority, had released a comprehensive set of guidelines for local firms dealing in digital currencies.

The regulatory framework identified the potential risks involved with crypto-related transactions, including their use to finance illicit activities such as drug trafficking and terrorism.

UAE Ahead of the Curve

However, the UAE is among the few Middle Eastern countries that has been receptive to the latest developments in financial technology. As CryptoGlobe reported in August, ADAB Solutions, a UAE-registered financial firm, launched the world’s First Islamic Crypto Exchange (FICE).

Notably, FICE’s operations are Shariah-compliant - which means that the exchange’s business dealings are in accordance with the teachings of Islam.

As covered recently, the UAE’s central bank will be working with Saudi Arabia’s regulators and financial market professionals in order to launch a state-backed digital currency. The joint initiative, which will involve developing Saudi Arabia’s national cryptocurrency for cross-border, bank-to-bank payments, has already entered its design phase.

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Trans-Fee Mining Crypto Exchange 'FCoin' Insolvent After Mistakenly Being Too Generous

One of the first cryptocurrency exchanges to adopt the controversial trans-fee mining (TFM) model, which has been called a “disguised ICO” has paused trading and withdrawals over a shortage of crypto worth up to $130 million.

According to a statement published by FCoin’s founder Zhang Jian, a former Huobi CTO, the exchange is now unable to process withdrawals as its reserves are down by between 7,000 to 13,000 bitcoin, worth over $130 million at press time, over an issue that’s “a little too complicated to be explained in a single sentence.”

Zhang’s statement details the cryptocurrency exchange wasn’t hacked, nor is it pulling an exit scam on its users. He detailed that an internal system error gave users more mining rewards than they should have received, noting the error wasn’t detected for a long period of time.

The transaction-fee mining model, which saw FCoin’s trading volume surpass $5 billion per 24 hours numerous times, sees the cryptocurrency exchange incentivize trading via its own token, FT. FCoin reimbursed users for transaction fees paid in BTC or ETH with FTs until 51% of the coin’s supply was distributed, and redistributed 80% of the BTC and ETH it collected to those holding FT tokens.

The controversial model drew criticism and saw Zhang defend it, claiming it was a misunderstood invention. At the time, he said:

If you look back at history, all new things were not recognized at the beginning. Many were believed to be fraud. Jack Ma was recognized as a fraud when he first promoted the internet in China.

Various cryptocurrency exchanges started adopting the TFM model shortly after, with research showing these platforms had unusually thin order books and low traffic taking into account the trading volumes they had.

According to Zhang, the errors in FCoin’s system gave away too many tokens in mining rewards from mid-2018 to mid-2019, when a complete back-end auditing system was implemented. As throughout 2019 the price of FT kept on dropping, Zhang and his team reportedly used their own funds to buy back tokens and drive up demand, a decision he claims was an error.

This, as it gave users a chance to sell their FT tokens and withdraw as much as possible from their accounts, while FCoin bought up tokens that kept on losing value. Zhang’s announcement came shortly after FCoin suspended its platform over a risk-control issue.

Zhang is now reportedly manually processing users’ withdrawal requests sent via email. The founder of the exchange claimed he will “switch tracks” to start again, and noted he hopes he can use the profits made from new ventures to “compensate everyone for their losses.”

Featured image via Unsplash.