Community Shocked as Bitfinex’s IEO for BFX Token Listed on Chinese Exchanges after Tether Scandals
Current exchanges in China have already started listing Bitfinex tokens future contracts. Recent scandals involving the company and tether in excess of $850 million have had had a major effect on exchanges decisions to work with the company. The basic assumption is an insufficient amount of evidence is had to justify the allegations, forcing the courts to delay decisions.
Bitfinex will soon be releasing an exchange-based token, supported by some of the largest traders in Asia. iFinex, the parent company of Bitfinex and Tether was recently sued by New York’s Attorney General Letitia James for the supposed mismanagement of more than $900 million in cash reserves leading to the loss of $850 million. An alleged cover-up took place, forcing the DA to take the company to court.
Letitia James wrote,
“In order to fill the gap, executives of Bitfinex and Tether engaged in a series of conflicted corporate transactions whereby Bitfinex gave itself access to up to $900 million of Tether’s cash reserves, which Tether for years repeatedly told investors fully backed the tether virtual currency ‘1-to-1.”
In order to pay back the mismanaged funds, Bitfinex will apparently release an exchange-based token. People are wondering now, why is the future token already listed on many exchanges?
Although the exchanges listing the future contracts are relatively small, there may be reasons unseen by most for the listings. According to James, Bitfinex is planning to use assets not yet frozen to buy unissued tokens, then burn them so other not yet issued tokens will increase in value.
Many smaller exchanges have suffered to a decrease in trading volume. Other major exchanges like Bitfinex have also consumed a majority of trade volume, again causing the smaller ones to suffer. It’s because of this that some of the smaller exchanges are jumping the gun with the hopes they can gain some traction when the new tokens are issued. Trials like this one often take years, leaving plenty of time for Bitfinex to launch an exchange token.
There has already been a solid effect on the world crypto market because of Tether. When launched late April, Bitcoin prices slumped down to just over $5k a token. BTC has since recovered to roughly $5,351 last week, gaining momentum for the months to come.
Assumptions by many are that crypto-traders simply don’t care and are accustomed to dealing with unforeseen events in the industry. That doesn’t mean the case won’t have a negative effect on the industry in the future. There is still a lot to be seen, according to Preston Byrne, a lawyer in the cryptocurrency sphere,
“This [iFinex case] will turn out to be the most consequential regulatory intervention in the crypto-sphere, anywhere in the world, of the last 3 years.”