Bitfinex and Tether’s parent company, iFinex, has decided against holding a public sale offering for its LEO tokens. The company confirmed the news in a Medium blog as it seems pleased with the funds it has raised through a private sale and thus prefers not to undergo the operational and regulatory hassles of opening the offering to the general public.
iFinex has been opaque about its token sale, but today it clarifies that it formed a new subsidiary called “Unus Sed Leo Limited (USL),” which has already launched a campaign to sell up to 1 billion USDt of UNUS SED LEO tokens.
iFinex further mentioned that the sale would only be available to qualified foreign investors, and citizens or residents of the USA, Canada, North Korea, China, and other restricted jurisdictions are excluded. The statement indicates that only selected purchasers contributed to the token sale, which the company expects to complete within the next seven days.
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Bitfinex Covered $850 Million Loss
While not providing concrete details about the offering, iFinex said the LEO is going to be a utility token that will be traded against Tether. The token will be used at the heart of the iFinex ecosystem and consequently used in Bitfinex exchange to pay and receive discounts on trading fees. It added that token holders would have access to various privileges across its cryptocurrency exchanges as well as other benefits from iFinex’s future projects, products, and services.
Bitfinex said earlier this week that if fewer than 1 billion USDT tokens were sold in the private sale, “the Issuer may thereafter sell remaining tokens at times and in a manner it deems appropriate in its sole discretion, consistent with applicable law,” the white paper reads.
However, Zhao Dong, a Bitfinex shareholder, told users on a Chinese social media platform, that the crypto exchange has already received $1 billion in commitments for its exchange token sale.
The regulatory winds have shifted since Bitfinex first began planning the sale. Indeed, the US authorities have stepped up their enforcement against the crypto firms with the New York Attorney General investigating them for fraud because of duplicitous statements about the digital tokens’ backing. Specifically, Bitfinex is accused of using $700 million from Tether reserves to cover up losses of $850 million.