Bitfinex launches white paper on imminent IEO; seeks to recover funds to offset $ 850 million loss

Bitfinex will launch its initial exchange offer [IEO], which should bring in $ 1 billion. This follows the recent news from the Hong Kong Stock Exchange that is trying to hide its undisclosed loss of nearly $ 850 million.

According to stockholder Zhao Dong, Bitfinex officially released its white paper on the IEO. The chips issued in the light of the IEO are entitled LEO and would be presented to private investors before the public offers after May 10.

The exchange has already raised $ 600 million of private investment. However, the same thing is not mentioned in the document and relies on verbal confirmations, Dong added.

Earlier this week, Dong revealed via WeChat that the exchange was coming out with an IEO. He added that interested parties, if they wished to participate in the offer, should contact him or contact DFund.

Unsurprisingly, the exchange that launches an IEO at this stage is due to the fact that the New York Attorney General has sued the market in exchange for hiding undisclosed losses and has used the link [USDT] reserves to cover a loss of $ 850 million. The above amount is frozen and locked in a number of accounts under the control of Crypto Capital, a payment processor.

Despite speculation, Bitfinex said it was "confident that it could recover these funds" without specifying that the IEO was the only solution. The exchange added, in the white paper, that it is,

"Actively collaborate with the judicial investigation and request the release of these funds through judicial proceedings."

With regard to the formalities within the IEO, the white paper indicated that tokens would be redeemed at timber merchants every month at the market price. The funds that would be used for the redemption would be the profits of the previous month of Bitfinex. Moreover, even with a period of 18 months, the exchange has the right to redeem the chips.

The frozen funds of $ 850 million, claimed by the Exchange, have been blocked by the regulatory authorities of the United States, Portugal and Poland. They will be used almost entirely to burn the LEO chips, if they are thawed by the authorities. However, if the account is not "thawed," Dong says the swap will take about four years to redeem all the chips, based on the trading profit forecasts for 2017 and 2018.

Despite the global news of Bitfinex's concealment leading to the IEO, the stock market also claims that its computer hacking of 2016 is another reason to embark on the manufacture of chips. The stock market was hacked for more than $ 60 million, or 119,756 BTC in August 2016, the second biggest piracy since the mountain. Gox.

If some of these Bitcoins are recovered by the exchange, more than 80% of these would be used to redeem the chips.