Crypto exchange Bitfinex shareholder Zhao Dong has revealed details of the company’s reported plans to issue a native exchange token, which he claims will launch via a $1 billion initial exchange offering (IEO) in the coming days.
Zhao — who runs a major Chinese BTC over-the-counter trading desk and is the founder of Singapore-based DFund — reportedly further claimed that $500 million tokens had already been vouched for. If all tokens are fully allocated, we will not have to run the IEO to the retail channel, it will be like a private placement.”
The new token has reportedly been characterized by Zhao as a hybrid of the model used for crypto exchange Binance’s native token binance coin (BNB) — which is used by Binance users to pay for exchange trading fees — and Bitfinex’s erstwhile BFX token.
As previously reported, BFX tokens were issued by the exchange in 2016 to compensate Bitfinex users affected by a major hack, which had resulted in the theft of around 120,000 BTC.
Upon Zhao’s first revelation of the Bitfinex’s alleged IEO and proprietary exchange token plans on April 29, the news sparked a wave of community concern in light of the lengthy history of controversies that have beset both Bitfinex and affiliated USD stablecoin company Tether.
As recently reported, the New York Attorney General’s office has this month alleged that Bitfinex lost $850 million in user deposits, and had subsequently secretly covered up the shortfall using funds from Tether — the latter of which has itself come under renewed criticism for allegedly being only backed 74% by USD reserves.