Bitfinex Already Sells LEO Tokens

Bitfinex Already Sells LEO Tokens

Last Wednesday, Bitfinex published a white paper regarding its new LEO token. The exchange was hoping to collect as much as $1 billion (or even more) by May 11.

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Last Wednesday, Bitfinex published a white paper regarding its new LEO token. The exchange was hoping to collect as much as $1 billion (or even more) by May 11. The so-called initial exchange offering (IEO) aimed to raise funds for the further development of its asset. Currently, Bitfinex continues to raise funds by selling LEO tokens in an ad hoc manner.

Financial regulators in Poland, Panama, and the USA have collectively blocked $850 million from Bitfinex’s funds and this is why the exchange came up with the idea of raising funds through an initial exchange offering. Though the exchange penned a credit agreement with Tether worth some $900 million, the company is yet to be given access to these fresh funds.

This whole LEO thing aims to financially support Bitfinex. That being said, we should note that in case Bitfinex has its funds unlocked, the exchange will burn all LEO tokens. Should that scenario never comes to fruition, Bitfinex will have to use a percentage of profits to burn the existing LEO tokens in the coming years.

“On a monthly basis iFinex and its affiliates will buy back an amount of LEO from the market equal to a minimum of 27% of the consolidated gross revenues of iFinex from the previous month, in perpetuity until no tokens are in commercial circulation,” the white paper reads.

Notably, Bitfinex is not seeking small-scale investors, as LEO tokens do not act as “securities” or utility tokens. Instead, it focuses on large-scale clients. Private investors will get the special opportunity to take advantage of the newly opened peer-to-peer market connecting LEO with Tether. This way they can seamlessly exchange their USDT tokens pegged to the US dollar for LEO and vice versa. LEO will also act as a stablecoin with a price tag of $1.

Interestingly, only non-USA residents can take part in the token sale, which is also not advertised on social media. Nevertheless, many community members see it as a blatant attempt of Bitfinex to save itself from bankruptcy. The exchange is slowly but steadily losing traction as traders barely trust its rather bizarre decisions.