Bitfinex Releases Update on Its $1 Billion Initial Exchange Offering

Bitfinex Releases Update on Its $1 Billion Initial Exchange Offering

The embattled crypto exchange, Bitfinex published the official whitepaper for its LEO token sale project earlier today, May 8. The token sale project is expected to raise $1 billion for the company that also announced that it would be launching a platform dedicated to raising funds for similar IEOs.

Bitfinex to Raise $1 Billion by Selling LEO Tokens

Blokt had earlier reported on the proposed $1 billion IEO by Bitfinex. However, the exchange has provided additional information to the general public. According to the whitepaper published by Bitfinex, the crypto exchange aims to raise $1 billion worth of USDT tokens by selling LEO, its own native exchange coin. Bitfinex added that the token sale would be on until 2019-05-11.

The token sale process would be kept private. However, if the company wasn’t able to raise $1 billion via private token sale, then the issuer has the right to sell the remaining tokens at any time and in the manner it deems fit.

The tokens would not be available for investors in the United States or any citizens of the country. The ban of US investors could be due to the lawsuit on Bitfinex and Tether by the New York State Attorney General’s office.

In the whitepaper, Unus Sed Leo Limited, a British Virgin Islands company was named as the issuer of the LEO tokens. Each LEO token would be sold for 1 USDT, although the issuer might decide to accept other forms of payment.

Bitfinex explains that the proceeds from the token sale would be used as working capital and for other business purposes. In addition to these, IFinex would use 27 percent of its monthly profits to buy back LEO from the market until there are no more coins in circulation. Also, roughly 95 percent of the net funds recovered from Crypto Capital and 80 percent of recovered funds from the Bitfinex hack would be used in repurchasing the LEO tokens from investors. The repurchased LEO tokens would be burnt, the whitepaper added.

Bitfinex to Launch a Token Sale Platform

Bitfinex announced its intention to launch a token sale platform by next month. Similar to Binance Launchpad and IEOs by other exchanges, Bitfinex would allow pre-vetted project developers to carry out token sales on their platform.

According to the whitepaper, projects that successfully raise funds via Bitfinex’s Initial Exchange Offering platform would be listed on two cryptocurrency exchanges; Bitfinex and Ethfinex. Furthermore, Bitfinex claims that it would be introducing a licensed and regulated security token exchange. However, it would not be available to U.S customers.

Tether, the company behind the USDT stablecoin and Bitfinex have been involved in numerous scandals over the past few years. There are allegations that the two companies, who share the same management, were responsible for the Bull Run of 2017 by artificially inflating the price of the cryptocurrency.

Recently, the New York State Attorney General filed a lawsuit against the two companies after finding out that Bitfinex lost $851 million via its payment processor, Crypto Capital. Tether meanwhile covered for Bitfinex’s loss using some of its funds. Bitfinex had denied losing the funds, instead, claiming that the funds were frozen and kept safe by Crypto Capital.

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