Zhao Dong is one of many shareholders of Bitfinex, an exchange that focuses on cryptocurrency. He recently revealed some promotional materials that detail Bitfinex's initial exchange offering, or IEO. The exchange's IEO is estimated to reach around $1 billion. This information was originally shared on Dong's Twitter page on May 4th.
According to the document, the company that owns Tether and Bitfinex has announced the availability of around $1 billion worth of the exchange's tokens. While nobody is certain, this document was allegedly published by iFinex. These tokens, which have been referred to as LEOs, are designed to be the central form of currency that exists within the ecosystem of the company. The document also specifies that these tokens aren't white paper.
The promotional document makes a promise that token holders will gain access to a host of benefits on the Bitfinex platform including reduced trading fees. The token has also been promised to grant a decrease in lending fees, discounts for deposits and withdrawals, and much more. The document further states that these advantages will also be enjoyed on future trading platforms, services, and products created by iFinex. The company claims that LEO sales won't be available to people in Canada, the United States, and a host of other jurisdictions.
The cryptocurrency giant is struggling to cover over $850 million worth of funds that have been frozen in many different accounts. These funds are under the direct control of payment processing firms, according to The Block. According to the promotional document, the LEO sales are intended to make up for these current losses.
Last week, Bitfinex was accused by the New York Attorney General's office for utilizing funds from their Tether company to cover the $850 million of frozen assets. Towards the end of April, rumors about the planned IEO started to circulate. Dong was able to confirm these rumors.
According to Contelegraph, a group of lawyers from Tether was able to confirm these suspicions. The company only has enough capital to cover three-quarters of the increasing demand for their stablecoin currency. It's unclear how this IEO will be received by the cryptocurrency industry.