Bitfinex operator iFinex has issued a white paper for a USD 1 billion initial exchange offering (IEO). Per a release, the company says it will issue 1 billion LEO tokens through Unus Sed Leo, a company based in the British Virgin Islands.
After a lot of speculation and impatience that were arising over the upcoming Bitfinex token sale, the real white paper finally came to see the light of a day. We say ‘real’ because last week, opportunistic fakers were creating bogus white papers that purport to describe the details of the upcoming sale. Why? To scam potential buyers out of their cash.
However, now the official white paper for its $1 billion exchange token sale is here, and it reveals launching a dedicated platform for projects to raise funds via similar initial exchange offerings (IEOs) starting from next month.
The company says it will issue 1 billion LEO tokens through Unus Sed Leo, a company based in the British Virgin Islands.
Moreover, they will use the proceeds of the IEO “for working capital and general business purposes, including capital expenditures, operating expenses, repayment of [debts] and other recapitalization activities.”
Token sales will be made in Tether (USDT), a stablecoin that is also operated by iFinex. The token price has already been set at “1 USDT per LEO token.” However, Bitfinex appears to have left the door open for other forms of investment, stating>
“The issuer may accept other forms of [compensation at its discretion].”
The whitepaper states that the LEO tokens would be priced at 1 USDT. A specific LEO:USDT market for peer-to-peer trading will be opened once the token sale has been completed.
A maximum sell cap of 1 billion USDT in LEO tokens has been placed by Bitfinex and this offering would be private and for sale outside the United States:
“TOKENS WILL NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS AND OTHER PROHIBITED PERSONS”
Bitfinex claimed that LEO tokens would be the epicenter of the iFinex ecosystem. The whitepaper says:
“LEO will be the utility token at the heart of the iFinex ecosystem. Token holders will experience benefits across the entire portfolio and are expected to obtain benefits from future projects, products, and services, whether or not detailed within this white paper.”
LEO Tokens Involving a Great Risk and Uncertainty
Bitfinex also warned the new LEO users that LEO tokens are speculative and involve a high degree of risk and uncertainty. The sale of LEO tokens is, as they are noting, aimed solely at persons who have sufficient knowledge and understanding of blockchain and cryptographic tokens and other digital assets, in order to be able to evaluate the risks and merits of a purchase of LEO tokens and are able to bear the risks thereof, including loss of all amounts paid and loss of LEO tokens purchased.
“Potential purchasers must further make their own independent assessment, after making such investigations as they consider necessary, of the merits of, and their suitability for, purchasing any LEO tokens and should consult their accounting, legal and tax representatives and advisers in order to evaluate the economic, legal and tax consequences of purchasing LEO tokens.”
Some potential clients wanted the company to explain the terms regarding the repurchasing and burning of tokens, since this token offering was seen by many as a scapegoat tactic.
Bitfinex confirmed that they will buy back the tokens on a monthly basis for a price “equal to a minimum of 27% of the consolidated gross revenues of iFinex,” based on previous month’s calculations. This will carry on until no tokens are in public circulation.
Also, at least 95 percent of the net funds that may be retrieved from the regulatory authorities of the US, Poland and Portugal, will be “used to repurchase and burn outstanding LEO tokens within 18 months from the date of recovery.”
Bitfinex also referenced its August 2016 hack, stating that 80 percent of the recovered net funds will be used to repurchase and burn outstanding LEO tokens within 18 months from the date of recovery.
The whitepaper also revealed iFinex’s current project and its upcoming plans that include adding Bitfinex, Ethfinex Trustless, and Nectar as the ongoing project whereas the future projects in the list are Bitfinex Derivatives, eosfinex, iFinex IEO Platform , A Licensed & Regulated Security Token Exchange, Dazaar, Betfinex, Digital Assets on Lightning Network and μFinex.