BeInNews Academy Ltd © Street: Suite 1701 – 02A, 17/F, 625 King’s Road, North Point. Hong Kong.
Bitfinex has been shrouded in controversy but it seems like the exchange might get out of going bankrupt in the shadiest way possible. The exchange has finished their new token offering, allegedly raising some $1B of USDT during the sale. Some commentators are raising questions, however.
After the New York Attorney General pressed charges against Bitfinex last month, the exchange has been struggling to justify its business model. If found guilty, it will be forced to pay $850M in damages due to fraud.
Shortly after the lawsuit, however, Bitfinex announced a token sale for its LEO tokens. Intended to be the ‘utility tokens at the heart of the iFinex ecosystem,’ the private token sale allegedly raised $1B in USDT.
Paolo Ardoino, the Senior Market Analyst at Bitfinex, tweeted that the exchange raised $1B in USDT in 10 days. Apparently, multiple private companies made investments of over $100M each.
. @bitfinex is able to raise 1b USDt in 10 days, in a private sale. Private companies, giants in our industry and outside, made investments for > 100m each. A legion of inside and outside users made investments for > 1m each.
— Paolo Ardoino (@paoloardoino) May 13, 2019
Ardoino originally tweeted that the exchange raised $1B paid in its stablecoin,(USDT). However, the transaction volume doesn’t match this assertion. In fact, USDT transaction volume has not seen any significant uptick as Mati Greenspan points out:
Bitfinex is claiming that they've already raised 1 billion USDT from private investors in just 10 days.
The total market cap of USDT is $2.76 billion.🤔 https://t.co/jb5zLWQX5A
— Mati Greenspan (@MatiGreenspan) May 13, 2019
Something certainly looks fishy. If Bitfinex actually had its largest-ever IEO and raised over $1B in USDT, surely we should see a significant change in activity for Tether.
Upon hearing about the criticism, Ardoino backtracked a little bit and responded to Greenspan saying, “We also accepted USD, we should have said USDT or USDT equivalents.”
It seems painfully obvious to anyone what is happening here — BItfinex got sued for $850M for fraud and then held a fake token offering to save face. The real question is, who in their right mind would invest 100s of millions of dollars in a company currently under investigation in a major case?
Do you believe Bitfinex actually raised $1B for its token sale? Let us know your thoughts in the comments below.
Do you need trading guidance during this Coronavirus outbreak? BeInCrypto is here to help! Join our Telegram Trading Community for Market Updates, exclusive Trading Signals and a FREE Trading Course! Images courtesy of Shutterstock, Trading View and Twitter.