The Hong Kong-based crypto exchange is planning to raise $1 billion through a token sale, Dong Zhao, one of the shareholders of the exchange, revealed.
Earlier this week, Zhao first posted about the prospect on Weibo, the Chinese alternative for Twitter, and asked for suggestions from the community. He, however, did not reveal any details then.
According to a May 1 Coindesk report, he shared some crucial details about Bitfinex’s exchange token sale on Wednesday.
A hasty move?
The token sale will be only available to “qualified foreign investors,” and there will be a minimum buy-in amount of $1 million, Zhao wrote on WeChat. There will be a total supply of $1 billion tokens, and each will be valued at $1.
He requested the interested investors to directly contact him or get in touch with his Singapore-based firm DFund and must make a “soft” commitment by Sunday.
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The potential investors will have the option to back out after reviewing the whitepaper, and if they want to invest, they should do a “hard” commitment by depositing 10 percent of total investment.
“The system works on a first-in, first-served basis,” Zhao noted. “If the whole [1 billion is] fully allocated, we will not have to run the IEO to the retail channel, it will be like a private placement.”
Furthermore, $500 million worth tokens were already subscribed by investors, he claimed.
A hybrid approach
The Chinese billionaire also revealed that the token would be a hybrid of Binance Coin (BNB), the platform token for Bitfinex’s market competition Binance, and its own BFX token, which the exchange issued to compensate the victims of the cyber attack on the exchange in 2016.
“Bitfinex will destroy [the] token with full unfrozen funds in the future, in addition to referring to the logic of BNB token,” Zhao added.
Though Bitfinex did not confirm anything officially, the revelation by its shareholder came at a time when the exchange is struggling for legitimacy in the market. The New York Attorney General’s office recently accused the exchange of using funds from Tether’s cash reserves to cover its $850 million in losses.