Crypto Exchange Bitfinex Looks to Raise $1 Billion by Sale of Native “LEO” Token
On May 4, 2019, Dong Zhao, a stakeholder of Hong Kong-based cryptocurrency exchange Bitfinex, tweeted what is allegedly an excerpt of a whitepaper which sheds light on the exchange’s upcoming $1 billion initial exchange offer (IEO).
Bitfinex Unfazed by Recent Accusations
Recently, Bitfinex was in the news for reasons it would have preferably avoided.
As reported by BTCManager on April 26, 2019, the New York Attorney General (NYAG) Office accused Bitfinex and its affiliate company Tether of conspiring to cover a business loss worth $850 million with unauthorized funds.
The accusations from the regulatory watchdog not only dented the goodwill Bitfinex enjoyed for being one of the oldest cryptocurrency exchanges in the world but also cast serious doubts over the legitimacy of Tether’s so-called “king of stablecoins” USDT.
However, it seems that the exchange is looking past the charges as one of its prominent shareholders, Dong Zhao, tweeted on May 4, 2019, a document suggesting that Bitfinex wants to raise $1 billion through the sale of its native token LEO.
This comes just a few days after rumors sparked on the Internet about Bitfinex’s intentions to launch its IEO.
As per the document, Bitfinex is issuing $1 billion in LEO tokens to cover its $850 million funds currently frozen in multiple accounts by Crypto Capital, Bitfinex’s payment processing company.
Bitfinex’s Answer to Binance’s BNB
The document, allegedly released by iFinex – the parent company of both Bitfinex and Tether – suggests that LEO will be the utility token of the exchange’s future ecosystem. Perhaps the best guess would be that it would have utility much similar to what BNB token has for Binance.
According to the document, holders of LEO digital token will enjoy reduced crypto to crypto trading fees on Bitfinex and its upcoming decentralized exchange (DEX), EOSfinex. Further, LEO holders will also benefit from decreased lending fees, discounts on withdrawal and deposit fees, and reductions in derivatives fees.
The document goes on to claim that the benefits of LEO tokens will also stretch to future products, exchanges, and services launched by iFinex.
It’s worth highlighting that currently, participation in the Bitfinex IEO is restricted to private institutional investors. Per the document, retail and small-scale investors can partake in the IEO only after May 10, 2019, subject to the availability of tokens.
Crypto publication The Block states that the final version of Bitfinex’s white paper is still subject to change. Hence, investors should only take Zhao’s tweet at face value, at least for the time being.