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Freechat’s US$80 million financing mystery: the founder mined 55 Bitcoins a day ten years ago, but is now restricted from spending too much

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Long Yujiang said in an interview that it is currently unable to disclose the investor information of US$80 million and needs to wait for the investors to disclose it themselves.

Original Title: "Freechat $80 Million Financing Doubts: Founder Mined 55 Bitcoins 10 Years Ago, Now Restricted from High Consumption"

Original Authors: Meteor, Marco, ChainCatcher

The news of the $80 million financing did not bring the expected publicity effect for Freechat, but instead raised doubts among some Web3 practitioners. This is because after announcing the completion of two rounds of financing, Freechat has never disclosed any investment partners, and there have been no rumors within the industry about which capital invested in it.

"The high-profile 'holding a pipa to partially cover the face' style has sown the seeds of doubt in the industry and was questioned for 'fake financing' on the same day."

ChainCatcher investigation found that Freechat, an overseas Web3 social platform, is publicly promoted by its founder Jack Long, whose Chinese name is 龙禹江 (Long Yujian). He is from Sichuan, China and was an early Bitcoin miner. In 2013, the Huaxi Metropolitan Daily reported on Long Yujian's mining experience, stating that he once mined 55 Bitcoins in a day when the price of Bitcoin was around 4,000 RMB per coin.

On January 17th, during an interview with ChainCatcher, a Freechat representative declined to provide information about investors. "The financing is mainly in the form of equity, with tokens being only a part of it. Most of the investors bought shares in Freechat," and "they are all early-stage investors who followed along with the company's development."

On January 18th, Long Yujiang stated in an interview with ChainCatcher that the seed round of Freechat was funded by him and another investor, Lao Li. The $80 million financing needs to be disclosed by the investors themselves.

ChainCatcher investigation shows that Long Yujian founded Chengdu Tairuiya Technology Co., Ltd. (referred to as "Chengdu Tairui") in Chengdu in 2017. The company was listed as a "dishonest executor" in June 2021. Long Yujian has also been subject to court orders restricting consumption due to labor arbitration with employees and lawsuits with other companies.

Regarding these debt issues, Long Yujiang responded by saying: "Chengdu Tairui is currently insolvent and unable to repay its debts."

Who invested $80 million?

Freechat, which has been unknown for a long time, became one of the most eye-catching companies in the Web3 industry on January 8th due to the news of receiving a huge investment.

On the same day, a well-known Chinese venture capital media released an article stating that the blockchain social platform "Freechat" had recently completed a financing of 80 million US dollars, with a post-investment valuation of 800 million US dollars; the investor was not disclosed.

This article mentions that Freechat was founded in 2022 and completed a $2 million seed round of financing in August 2022.

It's not just a coincidence that Freechat's two rounds of financing news were both first released by the media, and the investment information for both rounds of financing has not been disclosed.

The above report became the source of information for various industry media and quickly spread within the industry.

However, with undisclosed investors and the project not being well-known in the industry before, the sudden announcement of a large amount of financing has also raised doubts. Some media suspect that this is fake news released by the project party.

Freechat's official website shows that it is a Web3.0 social application that uses end-to-end encrypted communication to ensure anonymity and privacy, and achieve free communication. The company was founded in 2020 and is headquartered in Los Angeles, USA. It will conduct an IEO on a blockchain exchange in 2023.

Freechat wrote in its white paper that its business includes social networking, e-commerce, NFT, value-added services (virtual value-added services such as membership and functional membership), advertising, content, payment, DeFi, games, etc.

The mobile application interface of this product is similar to that of Feishu, with added features such as Douyin short videos, Xiaohongshu graphics and text, WeChat chat, and Weibo posting. Users can set up a friend adding function, and this app supports paying a custom amount of FCC to add friends. After a successful payment, users can chat with their target friends.

FCC is the token issued by Freechat, with a total supply of 1 billion. On November 3, 2023, Freechat announced on social media that it will initiate a token burning plan, burning 100 million tokens and reducing the total supply to 900 million.

On December 12, 2023, FCC launched its trading platform on BitMart and began trading. As of January 18, FCC has only been listed on this exchange.

On January 19th, according to CoinMarketCap data, the FCC price was 0.04 USD, with a 24-hour trading volume of 751 USD. Based on this price, the market capitalization is 36 million USD.

On social media platforms, some users questioned the amount of its financing.

On January 8th, a user left a message under Freechat's official Twitter account, stating that they had raised $80 million in funding through token delivery. However, the current market value of all tokens is less than $70 million. The user asked if it was possible to disclose the specific investment information.

Freechat responded to this message by saying, "It's not convenient. The relevant organizations will announce it on their own at the appropriate time." They also stated that they still hold 10% of the equity and that the tokens are only a part of it.

On January 17th, a Freechat representative told ChainCatcher that the financing mainly involved the company's equity, with tokens being only a part of it. "Mostly, they bought Freechat's equity."

The person in charge refused to disclose specific information about the investor, stating: "It was an investor who started investing in the early stages of the company."

On January 18th, Long Yujian refused to disclose detailed information about investors during an interview with ChainCatcher, stating that he could not reveal it and that "institutions will disclose it on their own."

At the time of writing, no organization has announced its participation in the financing of Freechat.

Long Yujiang also revealed that the seed round of financing for Freechat, which amounted to $2 million, was mainly contributed by him and another investor, Lao Li, with each person investing $1 million.