Reports from China claim that the prominent Bitfinex shareholder and Bitcoin OTC trader, Dong Zhao has confirmed the Hong Kong-based cryptocurrency exchange Bitfinex has plans to issue its own exchange and to sell it either through a private placement or an initial exchange offering.

You will probably have heard of the events that occurred last week when the New York Attorney General, Letitia James issued a press release to announce that her office had obtained a court order against iFinex – Bitfinex’s operator – and Tether Limited ‘enjoining’ the two companies from “from further violations of New York law in connection with an ongoing activities that may have defrauded New York investors that trade in virtual or ‘crypto’ currency.”

As reported by CryptoGlobe:

“The main allegations in this ex parte court order against the two respondents was that cash (and cash equivalents) backing the stablecoin had been used to help Bitfinex engage “in a cover-up to hide the apparent loss of $850 million dollars of co-mingled client and corporate funds.” Apparently, Bitfinex, which had been having difficulties securing a stable traditional banking relationship, had used the services of Panamanian company Crypto Capital to process clients’ fiat deposts/withdrawals, and $850 million was the amount of funds sent to Crypto Capital, which later had claimed that the funds had been seized by officials of Portuguese, Polish, and American governments as part of an on-going investigation into the financial activities of that company.”

On April 26th, Zhao spoke to Coindesk and said that “he remains ‘supportive’ of both Bitfinex and Tether”, that Giancarlo Devasini, Bitfinex’s CEO, had told him that “this is a temporary situation”, and that “the exchange ‘need[s] a few weeks and the funds will be unfrozen.”

Yesterday, reports surfaced that Zhao had spoken on WeChat that the exchange might be holding a $1 billion token sale potentially as early as next week and that “individuals interested in participating should reach out to either him or to DFund, a group he founded.”

  • “There will be a minimum buy-in of $1 million, and a total supply of 1 billion tokens, available for $1 each” (with investors already promising to put in $500 million)

  • “Only qualified foreign investors will be allowed to invest” (and that “they must make a ‘soft’ commitment to the sale by Sunday”)

  • “Once investors have been able to review the token’s white paper, they can choose to cancel their soft commitment or convert to a hard commitment, with a 10 percent deposit”

  • “The system works on a first-in, first-served basis” such that if “the whole [1 billion is] fully allocated,” there will be no need “to run the IEO to the retail channel” (i.e. “it will be like a private placement”)

  • Bitfinex’s token will be a ‘hybrid’ of BNB and BFX (described by Coindesk as “the token Bitfinex issued to customers who lost money in a 2016 hack, which was convertible to equity and was fully redeemed the following year”


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