Bitfinex is also making plans to set up an on-platform initial exchange offering, popularly referred to as an IEO.
This news comes after recent happenings around the Hong Kong exchange trying to cover up an undisclosed loss of about $850 million.
Larry Cremate, citing Chinese billionaire and the exchange’s shareholder Zhao Dong as his source announced that Bitfinex has formally released its IEO whitepaper. The tokens issued as a result of the IEO will be called LEO and it will take place on May 10.
Even more surprising is that Bitfinex has allocated $600 million from the proposed funds to private investors, whales and venture capital firms.
One of the beneficiaries is believed to be Mike Dudas of The Block. He tweeted earlier today that he has been offered a chance at an allocation from a “legitimate firm”.
It is unclear whether private investors will be able to purchase LEO at cheaper rates than members of the public.
From experts point of view, LEO has a lot of similarities to the Binance Coin (BNB) as it will serve as a coin for utility and as a redeemable asset.
The white paper also stated that some of the LEO tokens will be repurchased by Bitfinex monthly.
Unlike Binance’s plan to spend a minimum and maximum of 20% of its profits to burn BNB, Bitfinex will be spending a minimum of 27% of its profits from the last month. This makes its burn rate much higher than that of Binance.
Bitfinex Made About $404 Million In 2018
The white paper states that Bitfinex made a total of $404 million in 2018 during the bear market. This is quite an impressive feat and it stands as a pointer to how well Bitfinex has been doing in time past.
Despite the speculations that Bitfinex is looking for ways to raise funds, it insists that the IEO wasn’t as a result of its recent troubles with NYAG.
Bitfinex claim that the 2016 hack on the exchange was a major determinant in its reason in tokenization.