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Expert forecasts on Bitfinex plans

05/07/2019
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  • Bitfinex
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Exchange Bitfinex is preparing to release its own digital coins. The holding of IEO and the release of a token, as a rule, is reflected in the overall picture of the exchange quotes. On the one hand, the appearance of a new asset is always interesting for investors, but on the other, it matters what preceded such a decision and whether investments would not be a failure. Since we are talking about Bitfinex's plans for IEO, then, as they say, everything is not so simple.

What is Bitfinex and where did the assets go?

Bitfinex is one of the largest platforms for exchanging and trading various digital assets and fiat. The exchange ranks 4th in the CoinMarketCap ranking, is directly connected with Tether and is managed by IFinex Inc. Despite the fact that the exchange is positioning itself as a platform with the highest level of security, a recent scandal broke out, the loss of Bitfinex digital assets made many investors doubt its reliability. In spite of everything, the company is trying with all its might to get out adequately from this situation

The problem of security on crypto-exchanges to this day does not lose its relevance. According to CipherTrace, by the beginning of 2019, losses at the sites from the actions of fraudsters and hackers amounted to about $ 1 billion. Compared to last year, this is about 70% of losses for the entire 2018. And these are not final figures, the real losses are much higher.

Such problems do not arise from scratch - according to experts, due to the lack of transparent and fair regulation of the cryptocurrency sphere, losses will increase. In the case of assets with Bitfinex, the story turned out to be dark, and that is why it attracted the attention of the New York office of the prosecutor.

According to representatives of the exchange, the Panama-based operator Crypto Capital Corp sent $ 850 million to transfer funds management on behalf of iFinex. Assets were not returned and generally evaporated in the air. What is Bitfinex doing? Announces that the funds have not been stolen or lost, but only frozen on the accounts of regulators.

To cover the losses Bitfinex had to company iFinex, which decided to use the reserves of stablecoin Tether.

But the Prosecutor of the State of Letizia James was not impressed by such explanations, so she initiated an investigation into illegal transactions. According to the prosecutor's office, US $ 850 million of client and corporate funds were concealed intentionally, in order to be able to launch a hand into Tether reserve funds.

For what purpose does Bitfinex intend to create a new token?

The fact is that the precedent with the loss of assets on the stock exchange has already been issued tokens BFX, which were shares of iFinex Inc. After that, Bitfinex stated that all the losses of its customers were compensated by 100% repurchase of issued tokens. Thus, the site is supposedly going to generate capital, lost due to transactions with Crypto Capital Corp.

After the US Attorney's Office became interested in the problems of the exchange, suddenly Zhao Dong made a statement about the release of the LEO token within IEO. The initial exchange offer limits the circle of investors, including only those who are able to invest $ 1 million, for a total of $ 1 billion. According to Dong, there are verbal agreements to acquire assets worth $ 600 million.

If the remaining amount cannot be collected before May 10 of the current year, absolutely everyone who participates in IEO will be able to buy coins.

In accordance with White Paper, Bitfinex plans to reserve 27% of its profits in order to be able to buy LEO at a market price every month. But the site has the right to acquire coins one and a half years later after defrosting. If it is impossible to return the arrested assets, the exchange will use the operating profit. As a result, it is possible to pay damages in four years.

Are there any prospects or will Bitfinex be saved by a new token?

There are a lot of rumors around the exchange situation, but interest is growing every day. According to experts, Zhao Dong is a serious person in the world of cryptocurrency trading and investing, his statements can be credible. In any case, he, in theory, should not provide deliberately false information.

In addition, a well-known representative of crypto-business in Asia believes that the new token will have better liquidity. But it had to be taken into account that Dong is a shareholder of Bitfinex, so it is quite clear that he will stand guard over the interests of the site.

Many traders are skeptical of such claims. Bitfinex previously also stated that all lost funds will be compensated. But if the exchange issues a new token, are the prosecutor's suspicions unfounded? Thus, the credibility of the site can be undermined.

In the meantime, Bitfinex is appealing to the court asking to reject the previous decision on the seizure of assets. In turn, the state prosecutor immediately asked to reject this petition, because the company has not yet provided the required documents, from which it will be clear how stable the current position of the stock exchange is or whether there are financial problems on the stock exchange.

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