There is something pretty interesting happening now during the latest sale of Bitfinex’s LEO tokens. Coindesk has reported that several investors based in the U. S. are purchasing the tokens of the company indirectly.
Bitfinex is openly refusing to sell tokens to residents of the U. S. or companies based in the country, so companies such as Arrington XRP Capital and Arca are using indirect buyers in order to acquire them. These companies have found a way to purchase the tokens in a fully legal way despite the hassle of not being able to acquire them directly.
Why is Bitfinex so eager to avoid investors from its own country? Mostly because of the current spat between the company and the New York Attorney General. Some months ago, the NYAG accused Tether and Bitfinex of scamming investors because the stablecoin administrator used some of the funds to lend money to its sister company.
Since them, Bitfinex is trying to prove at all costs that it does not have any client based in New York, so the whole case is out of the NYAG’s jurisdiction. Bitfinex is not even offering tokens to foreign companies with U. S. investors, so they are pretty strict.
While is a pretty great idea for Bitfinex to be safe, Michael Arrington, a partner of Arrington XRP Capital, believes that this decision will not stop him. His company is based on the Cayman Islands, but he’s an American, so he was barred.
The solution? To hire a third party company and pay a premium to get the tokens indirectly. This way, Bitfinex is not harmed and the company gets what it wants.
Jeff Dorman, the Chief Investment Officer (CIO) of Arca, has a pretty similar story. His company is based on the British Virgin Islands and he invested in LEO tokens via a third party company.
Bitfinex was also interviewed by Coindesk and the company revealed that no U. S. residents were able to buy tokens. Obviously, they did not account for these sales which were out of their responsibility.
The Launch of LEO Tokens
The announcement of the LEO token sale was made after the accusations made by the NYAG surfaced. In fact, there is a strong correlation between Tether borrowing the money from its sister company and the token sale.
After the scandal, Bitfinex decided to sell the tokens in order to pay its debt of $850 million USD to Tether. The first Initial Exchange Offering was held back in May and tokens are still being sold.
At the moment, LEO tokens can be used in order to get discounts on fees on Bitfinex and work in a similar manner to Binance’s BNB tokens.