iFinex, the owner of Hong Kong-based cryptocurrency exchange Bitfinex, is reportedly planning to raise $1 billion worth of Tether (USDT) through an initial exchange offering (IEO) for a new exchange token called LEO.
According to a recent report by The Block, which cites Bitfinex shareholder Zhao Dong, Bitfinex has already had over $600 million in verbal commitments from private investors. The company plans to open up the sale to the general public on May 10 if the full raise is not met.
Bitfinex Official document about the LEO token pic.twitter.com/YR5FdS4iUY
— Dong Zhao (@zhaodong1982) May 4, 2019
Similar to Binance Coin (BNB), LEO tokens will provide discounts on trading and lending fees on Bitfinex and EOSFinex. The prospectus also states that Bitfinex will be re-purchasing LEO on a monthly basis at the market price using at least 27% of iFinex’s consolidated gross revenue from the previous month — until 100 million or fewer LEO are left. Tokens used for fees, “may also be burned.”
This news comes shortly after the New York State Attorney General announced that it is suing Bitfinex and Tether parent iFinex, for its misappropriation of funds tied to its partially asset-backed stablecoin Tether (USDT) to cover an $850 million loss.
Unsurprisingly, the document indicates that the reason for the launch of the new “utility token” is due to the $850 million in funds that are currently frozen in numerous accounts controlled by Crypto Capital, a payment processing company tied to QuadrigaCX. Should those funds be recovered, the document claims at least 95% would be used to repurchase LEO tokens to burn within 18 months.
Additionally, if funds are recovered from the August 2016 hacking event where the exchange lost 119,756 BTC, at least 80% would be used to buyback LEO within 18 months.
The addition of LEO would significantly shift the exchange token landscape. According to the AltDex Exchange Token Index (ALTEXC), the current $1 billion market cap would make LEO the second largest exchange token behind BNB. The token will initially be listed on Bitfinex, EOSfinex and Ethfinex, according to the prospectus.
Interestingly, the name Bitfinex chose for its exchange token is apparently based on the company’s Latin motto, “unus sed leo,” which is taken from Aesop’s “The Sow and the Lioness,” and roughly means “one, but a lion.” The lesson being that quality is more important than quantity.
According to the prospectus, the token’s whitepaper is forthcoming.
Image: Marco Verch / Flickr
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.