Bitfinex IEO Plans Get Praise from Fundstrat’s Tom Lee Who Reveals Oversubscribed LEO Tokens
- Bitfinex launches initial exchange offering for $1 billion.
- The LEO tokens are oversubscribed, which shows a positive reception by their users.
Everyone in the cryptocurrency market knows about the drama surrounding Bitfinex, which recently revealed that it was working to reclaim its loss of $850 million with the use of an initial exchange offering (IEO). The IEO is worth $1 billion, and it looks like the effort is gaining momentum.
Thomas Lee, the head of research for Fundstrat, says that the LEO tokens are “oversubscribed,” adding that the exchange’s offering is increasing popularity. Lee believes that more attention on the exchange is a sign that the public is trusting it, even though it has succumbed to major issues recently.
In a tweet on May 6th, Lee commented that the oversubscribed state of LEO confirms that Bitfinex is regaining the former trust that users once had.
Hearing @bitfinex LEO is oversubscribed… again affirms our sense that the Bitfinex has earned the trust of its customers/clients… and generally speaks well of them
— Thomas Lee (@fundstrat) May 6, 2019
Zhao Dong, a shareholder of Bitfinex, ended up publishing the whitepaper for the LEO tokens, showing that almost the whole loss is held up by regulatory authorities in the US, Portugal, and Poland. However, once this funding is released, the company plans to use the millions as a way to burn the LEO tokens. In the event that the account holding the “loss” remains frozen, the exchange has between four and five years to purchase the tokens back, using the profit projections from the last 24 months as a basis.
With this tactic and how the exchange is valued at $1 billion, Lee noted that the token supply that is added would end up with a short-term negative impact on the price of Bitcoin. The supply would ultimately shock the market for a while, forcing the market to absorb that supply itself.
If instead, the transactions result in fiat purchases of crypto assets, the investors that purchase the tokens become a part of the crypto industry. Dong still says that this option wouldn’t make much sense. At this point, no matter which way the tokens are handled by the market, the fact that the market is seeing oversubscribing of the token is a good sign.
The statements from Lee were made in response to the allegations made by the New York Attorney General on May 5th. The parent company, iFinex, said that the order from the NYAG had “inaccurate or incorrect facts and wrong legal standard.” Furthermore, iFinex called the order “highly disruptive,” since the reserves from Tether remained frozen, and that no fraud had taken place.