Bitfinex Launches Trading for LEO Token After Raising $1 Billion Privately
The exchange reportedly raised significant funds in private placements for its IEO, and the new native token was scheduled for trading on May 20.
Bitfinex launched trading pairs for its new native token, LEO, after performing a fast initial exchange offering (IEO) in the past few weeks.
The token, named after an Aesop fable, and bearing the full name of UNUS SED LEO, will trade against Bitcoin (BTC), US dollars, Tether (USDT), Ethereum (ETH), and EOS. Trading was scheduled for 8:00 UTC on Monday.
During the IEO, the LEO token had a nominal price of $1, and Bitfinex claims to have raised $1 billion through private offerings within days. The need to launch an IEO arose after the exchange lost access to $850 million of its funds, due to investigations against its payment provider CryptoCapital.
“Upon publishing the UNUS SED LEO whitepaper last Friday, May 10th, Bitfinex conducted and completed a private sale of 100% of outstanding UNUS SED LEO tokens in exchange for one billion USDt worth of Bitcoin, USD, and USDt,” Bitfinex announced earlier.
The launch of the LEO token was viewed with some skepticism, especially due to the large sum raised in a very short period. The need to raise further funds arrived after the iFinex exchange operator asked for a credit line from the issuer of Tether. The credit line was counted toward the backing of each USDT coin, which led to a situation where each USDT was only 74% backed by actual dollars, while owners of USDT in effect carried the risk of paying the equivalent of $1 for each stablecoin.
Separate traders went on to denounce the LEO launch as an attempt to further hide losses and spread the risk to the entire cryptocurrency ecosystem:
Despite the negative news surrounding iFinex, Bitfinex and Tether, the activity of USDT increased over the past weeks, helping launch BTC to above $8,000. On Monday, just hours ahead of the LEO live launch, BTC traded at $8,002.50, recovering quickly from a deep crash toward $7,300 on Friday.