Yes, you heard it right, Bitfinex cryptocurrency exchange plans to raise $1 billion in Tether (USDT) via initial exchange offering (IEO). It was first reported by a member of the Twitter community ‘ Dovey Wan’.
Bitfinex To Raise Billion via Initial Exchange Offering (IEO)
However, it comes as a rumor, later Dovey Wan’ states that one of the Bitfinex’s shareholder agreed to it. This is quite a surprising update due to the ongoing controversy around Bitfinex and Tether. Nevertheless, the Tether is the Bitfinex’s own token which bothers many crypto enthusiasts and traders.
Until the press time, Bitfnex didn’t confirm the report officially. However, if it comes as a true statement and officially confirmed, then the community’s voice on whether or not the platform is actually liquid is worth considering.
Nevertheless, in the case of IEO, participants have to buy exchange’s native token and help Bitfinex raise billions in so-called stablecoin, Tether. Bearing this in mind, the community on Twitter is assuming that the exchange is facing liquidity issues. While many people call USDT as a stablecoin, with the recent frozen funds of $750 million from Tether’s reserve fund, USDT is missing the respective $750 million funds to be a stablecoin – which other side supposed to have to be a stablecoin.
With having 18.5K followers, Dovey Wan often shares breaking stories and the current market scenarios. In her continuous tweets, she also adds that allocation of Bitfinex’s IEO already begins as such folks are selling it in few channels, she said.
I just don’t see how this can be sustainable, it won’t make Tether fully-backed again unless they distribute profit/new fund raised back to Tether reserve. BFX has already securitized + tokenized its future cash flow for their last hack, this is another layer of leverage on top
Nevertheless to note that the exchange has first hit with the Bitlicense rejection by New York Department of Financial Services’ (NYDFS) and the New York State’s Attorney General accused Bitfinex of using $850 million worth USDT or Tether’s reserves to cover up the loss of funds. However, Bitfinex’ shareholder, Zhao Dong’ says the story isn’t over yet.
In fact, Dong has also contributed to the matter of Bitfinex’s rumored IEO. In one of his post (written in Chinese) which later translated to English and shared by a Twitter user @Zirui_z, – in his post, he says
‘there’s a high possibility that Bitfinex is going to do an IEO’.
What’s your take on Bitfinex’s plan of raising billion via IEO in USDT. (If it gets confirmed by exchange).? Let us know in the comment below
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Tabassum is a full-time content writer at Coingape. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies. Follow her on Twitter at @Tabassumnaiz and reach out to her at Tabassum[at]coingape.com