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Amid its freshly inflamed clash with the office of the Attorney General of New York (NY AG), cryptocurrency exchange Bitfinex is apparently moving full steam ahead on an exchange token offering to help sidestep $850 million USD in funds that were reportedly seized by U.S. and European officials in 2018.

Like how BNB functions for Binance, the Bitfinex token, named UNUS SED LEO, is aimed at being a “utility token at the heart of the iFinex ecosystem” according to a marketing document released over the weekend by iFinex shareholder Dong Zhao.

Bitfinex Review

iFinex owns both Bitfinex and Tether Limited, the issuers of the tether (USDT) stablecoin. The NY AG has argued that Bitfinex’s leadership tried to hide borrowing hundreds of millions of dollars from Tether to make up for the seized funds.

Even with the legal stakes around Bitfinex being higher than ever, investor interest in the LEO sale, which is set to raise $1 billion, has been undeterred. On May 5th, the aforementioned Zhao launched LEO preorder purchases on his RenrenBit crypto app.

For his part, Thomas Lee of Wall Street pro-crypto firm Fundstrat has noted that there’s murmurs the LEO sale is “oversubscribed,” suggesting demand for the token is already high.

The exchange token’s private sale window will reportedly close on May 10th. If its $1 billion funding goal hasn’t been reach at that point, a public sale has been planned.

Whatever ends up happening with LEO and USDT, the fuss has led to an acute bitcoin price premium on Bitfinex, where BTC has consistently been trading at higher valuations than has been seen on other major exchanges in recent days.

NY AG and Bitfinex Continue Their Chess Match

Bitfinex has since disputed the general crux of the NY AG’s fraud allegations, so the opening salvos of the legal battle have been launched. Now both sides are figuratively moving toward the middegame.

In a filing made on Saturday with the Supreme Court of the State of New York, the NY AG argued that Bitfinex’s leadership should be forced to disclose documents regarding how Tether made its loan to Bitfinex.

“We’ve given you much latitude to resolve these situations and months beyond your original estimates, we need to have more transparency now,” the NY AG said.

One day later, Bitfinex’s lawyers fired back with their own filing, arguing that the injunctions the NY AG received last month should be rescinded because they could further lead to “great disruption to Bitfinex and Tether — ultimately to the detriment of market participants.”

Conversely, the NY AG had contended in their latest filing that neither enterprises’s operations would be unduly harmed by complying with the court orders in question. It remains an open question where the legal battle goes from here, but for now it seems both sides are digging their heels in.

CoinMarketCap Walks Back from Bitfinex BTC Price

Bitfinex is trying its best to overcome the NY AG’s legal challenges as unscathed as possible, but the unfurling dispute has already had negative repercussions for the exchange, namely with regard to its prestige.

Of course, Bitfinex still remains one of the largest cryptocurrency exchanges in the ecosystem. But some may stop turning to it.

An example of that dynamic comes via popular crypto tracker site CoinMarketCap, which has now removed Bitfinex’s bitcoin price from its average BTC price calculations — an indication that the site no longer trusts the exchange’s data.

Notably, the move comes just days after CoinMarketCap spearheaded the Data Accountability & Transparency Alliance (DATA) initiative with the likes of industry players like Bitfinex, Bittrex, and Binance. The group had been created to find “gaps, propose strategies and measures to enhance data accountability and transparency” in the space.


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Posted by William M. Peaster

William M. Peaster is an expert writer and editor who specializes in the Bitcoin, Ethereum, and Dai beats in the cryptoeconomy. Has appeared in DemandSolutionNews, Binance Academy, Bitsonline, Bitcoinist, and more. Enjoys tracking smart contracts, DAOs, dApps, and the Lightning Network. Learning Solidity. Follow him on Twitter: @WPeaster


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