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Bitfinex Published More Details About Its IEO

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Bitfinex cryptocurrency exchange plans to raise $ 1 billion in the IEO, according to white paper. The final version of the document will able to change, but analysts have already warned that the planned campaign may adversely affect the Bitcoin price.

According to Zhao Dong, Bitfinex will release token under the ticker LEO and initially offered to a limited group of investors. Dong also confirmed previous reports that Bitfinex received verbal confirmation of investors about their intention to acquire tokens for $ 600 million, however, if the coins are not fully distributed by May 10.

White paper also states that the token is being issued to cover $ 850 million, which were frozen in the accounts of the payment company Crypto Capital and because Bitfinex have problems with the prosecutor’s office in New York. At the same time, the exchange declares that it actively cooperates with the investigation and uses the procedural norms to defrost these funds and expresses confidence that it will be possible to return them.

LEO tokens shares at market prices on a monthly basis. For these purposes, Bitfinex intends to allocate at least 27% of its profits, but it also reserves the right to buy out the tokens within 18 months after the funds are unfrozen.

Zhao Dong additionally told about Plan B: if it is not possible to return the frozen assets, the exchange will use its operating profits to pay off the tokens. Based on the performance over the past two years, Bitfinex expects to redeem them within four years.

Also, to repay tokens BTC can be used, which the exchange lost as a result of a hacker attack in August 2016. This will happen if a part of almost 120,000 BTC can be returned.

The LEO token itself will allow Bitfinex users to receive discounts on commissions for trading transactions in cryptocurrency-cryptocurrency pairs, and also give them more favorable credit and withdrawal terms.

Despite the fact that Bitfinex’s plans at first glance are not directly related to the wider market, the head of the research department of Fundstrat, Tom Lee, believes that they may adversely affect the price of BTC.

Lee also added that miners sell bitcoins for $ 7 million daily, and IEO for $ 1 billion is actually 142 days of their activity, concentrated in one day.

 

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