See our previous post on the case involving Bitfinex.

Bitfinex and its parent company iFinex recently announced an IEO in the form of a token sale worth $1 billion of a native Bitfinex token called LEO. This is in an effort to recoup the recent loss of funds frozen in the CryptoCapital debacle.

The structure of the token sale will initially involve private investors, with a claim of $650 million already raised via verbal and nonbinding commitments. After the initial private sale, any remaining tokens will be made publicly available on May 10 as a general IEO.

The Bitfinex IEO will attempt to cover the loss of $850 million in funds that were frozen by multiple government agencies in connection to the CryptoCapital shadow banking case. The token buyback for participants are suggested to happen when the seized funds are released, the previous hack of BTC from 2016 is returned, or via 27% of their monthly profits. The LEO tokens will be destroyed as they are bought back.

Instead of choosing to have a public announcement, Bitfinex/iFinex chose to have major shareholder Dong Zhao share the document confirming the token sale and some of the key details about how it will occur. For liability reasons, it seems Dong Zhao is insisting that it is marketing material and not a whitepaper, allowing a discount on transaction fees on affiliated platforms such as ETHFinex.

We are looking forward to further developments on the Bitfinex situation and prospect of a tether collapse.

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