Bitfinex publishes IEO white paper, tokens will be redeemed after the thaw of 850 million funds

Bitfinex will issue an Initial Exchange Offer (IEO) that aims to raise a billion dollars, according to the IEO White Paper shared by Bitfinex shareholder, Zhao Dong.

The Bitfinex exchange tokens, named LEO, will first be offered to private investors, and then open to the public after May 10, if there remains an allocation, according to the white paper. According to Zhao Dong, Bitfinex has already raised $ 600 million in private but only verbal commitments.

The white paper notes that one of the main reasons for issuing tokens at that time is that the company's $ 850 million funds are currently frozen in several accounts controlled by the payment processor Crypto Capital. A week ago, the New York Attorney General (NYAG) filed a lawsuit against Bitfinex and Tether for raising funds to cover a loss of $ 850 million.

However, Bitfinex says in the white paper that he "actively collaborates with the judicial investigation and calls for the release of these funds through legal procedures". The company is "confident of being able to recover these funds," according to the white paper.

The trading chips will be redeemed monthly at the market price, with at least 27% of Bifinex's profit compared to the previous month. Bitfinex also reserves the right to redeem the chips within 18 months of the release of its funds. In fact, the white paper indicates that at least 95% of the unfrozen funds will be used to buy back and engrave the LEO in an equivalent quantity. Zhao Dong said that even if the money seized could not be recovered, according to forecasts of Bitfinex profits in 2017 and 2018, the company should be able to redeem all the chips within 4 years.

In addition, Bitfinex also notes that another reason for the issuance of IEO is the loss of 119,756 bitcoins by Bitfinex (about $ 72 million at the time) in August 2016. As a result, the recovery of stolen bitcoins may also occur. trigger the redemption process. If some bitcoins are recovered, at least 80% will be used to buy back LEO. However, in February 2019, Bitfinex can recover only 28 bitcoins. The hope of all recovering seems weak.

Like other tokens, such as the BNB of Binance, LEO will also offer discounts on trading fees. According to the white paper, LEO holders will have access to a 15% discount on transaction fees for crypto to crypto transactions, debtor rate and withdrawal fees.

The profit of Bitfinex in 2018 amounts to 404 million dollars and a dividend of about 261 million dollars, according to the white paper.