Just over a week ago, Bitfinex faced accusations of lost funds and charges of a cover-up. Now, its parent company, iFinex, is planning to temporarily recover those funds through a token sale and buyback. The company plans to sell $1 billion worth of tokens, which will be listed under the ticker symbol LEO.
Bitfinex has not officially announced a token sale yet, but Zhao Dong, a prominent shareholder, has leaked a document that reveals details about the planned sale. Although it does not discuss technical details about the token, as a white paper would do, it does describe the sale’s procedure and its incentives.
Connection to the Controversy
On Thursday, April 25, the New York Attorney General’s office accused iFinex and Bitfinex of fraud. Allegedly, Bitfinex operators lost up to $850 million and covered up the loss by silently moving funds out of Tether’s reserves. Later, proceedings revealed that only 74% of the Tether token supply is sufficiently backed.
Although Bitfinex claims that its missing funds were wrongfully…