Bitfinex Stakeholder Says the Troubled Exchange Has Sold All One Billion LEO IEO Tokens Issued …

Bitfinex is owned by iFinex, which also owns Tether, the company behind tethers, a “stablecoin” cryptocurrency used to swiftly enter and exit trading …

Chinese OTC Bitcoin trader Dong Zhao has once again taken to Chinese mega social platform WeChat to talk up an IEO (initial exchange offering) being issued by Bitfinex, the troubled cryptocurrency exchange in which Zhao reportedly holds equity, Coindeskreports.

Bitfinex is owned by iFinex, which also owns Tether, the company behind tethers, a “stablecoin” cryptocurrency traders use to swiftly enter and exit positions and conduct arbitrage.

Theoretically, in some jurisdictions, trading with tethers, which is purportedly pegged to and backed 1-to-1 by an equivalent number of US dollars held in reserve, can also help crypto traders avoid the taxable event that can be incurred occur when converting crypto profits back into regular dollars.

Whether or not tethers are actually fully-backed has been a matter of controversy for some time.

Lawyer Preston Byrne tweeted a screenshot from one of iFinex’s public statements.

The statement suggests the company is observing its own accounting standards:

Presented without comment pic.twitter.com/F5nXTDWFhE

— Preston Byrne (@prestonjbyrne) May 9, 2019

In June of 2018, University of Texas Finance Professor John Griffin and grad student Amin Shams issued a 60-page document in which they alleged that volumes of tethers were used 2017 to strategically prop up the price of bitcoins

“I’ve looked at a lot of markets,” Griffin told Bloomberg. “If there’s fraud or manipulation in a market it can leave tracks in the data. The tracks in the data here are very consistent with a manipulation hypothesis.”

Over the past two weeks, several enforcement actions have been levied against iFinex.

At the end of April, the Attorney General of New York issued powerful ex parte orders under the Martin Act (which covers securities) compelling iFinex to produce comprehensive financial records and freeze funds.

The orders allege that iFinex covered up the “loss” of $850 USD in funds and then used Tether reserve funds to cover operating expenses.

In documents responding to the orders, iFinex stated that it informed the public and regulators about the use of the funds before it occurred.

The company also claimed the funds were not lost but had rather been “seized” by Panamanian authorities who are now “safeguard(ing)” them.

It turns out the funds were seized from a company called Crypto Capital, which was run by Reginald Fowler. Fowler was arrested last week in Arizona and has been charged with bank fraud, conspiracy and operating an unlicensed money-transmitting business for allegedly providing “shadow banking” to crypto exchanges like Bitfinex. He is facing up to 30 years in prison.

Fowler allegedly processed hundreds of millions of dollars on behalf of crypto exchanges, which have often had trouble maintaining banking because of bank concerns about fund origins and money laundering.

iFinex lawyers have complained in court documents that the freezing of company funds is baseless and has compromised the company’s ability to assure liquidity on its exchanges.

For this reason, iFinex says, it has decided to issue one billion “LEO” tokens in a new instrument being favoured by exchanges called an “initial exchange offering” or IEO.

In an IEO, exchanges sell tokens to private (qualified) investors, partly based on the notion that the token is guaranteed to be listed on that exchange where it may eventually be sold to the public.

This is not the first time iFinex has created a token to assist it with financial problems.

In 2016, Bitfinex was hacked and $65 million USD in bitcoins stolen.

Bitfinex “socialized” the losses across users by docking accounts 35% and marking the void with a token designed to act as an IOU. Users were eventually paid off.

On May 1st of this year, Zhao reportedly wrote on WeChat that Bitfinex was ready to create yet another token, the LEO IEO, and on the 8th, the company released the official “LEO” white paper.

Now Dong Zhao has told Coindesk that all the tokens have already been spoken for in the form of hard commitments and soft (from which investors can back out).

Zhao even reportedly claimed on WeChat May 9th that, “…there’s a high possibility Bitfinex will not conduct a public sale,” if all one billion LEOs, sold at $1 USD each, is snapped up privately.

The anonymous critic “Bitfinex’ed” has written many blog posts and tweets alleging fraud at Tether. Bitfinex’ed has also been threatened by the company.

On May 8th, Bitfinex’ed tweeted that iFinex would laud the success of its LEO IEO, but would never prove it:

Bitfinex will announce that the IEO was a resounding amazing brilliant exciting success.

They will never provide proof.

— Bitfinex’ed — full stop. (@Bitfinexed) May 9, 2019

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Social selling startup Beidian raises RMB 860 million, challenges Pinduoduo

According to the company, it has attracted prominent venture capital funds as major investors, including Hillhouse Capital, Sequoia Capital, Sinovation …
May 10, 2019

2 min read

(Image credit: Beidian)

Chinese social retail startup Beidian announced Wednesday it closed its first round of funding totaling RMB 860 million ($126 million), as another Pinduoduo challenger joins in on the e-commerce fray.

According to the company, it has attracted prominent venture capital funds as major investors, including Hillhouse Capital, Sequoia Capital, Sinovation Ventures, and Gaorong Capital, among others. The funding will be used to upgrade its supply chain management system to improve the shopping experience, led by influencers or key opinion leaders (KOLs) on the platform, said Beidian in an announcement.

A subsidiary of mom and baby-focused e-commerce website Beibei, Beidian was founded in August 2017 by Allen Zhang, a former Alibaba product manager in Hangzhou, the capital of Zhejiang province in eastern China. Beibei most recently closed a Series C in January 2015 from investors including Chinese equity firm New Horizon, as well as Capital Today, an early investor of online retail heavyweight JD.com.

In an open letter sent earlier this year, Beidian’s president Gu Rong touted the company’s “proprietary” e-commerce model, in which the platform forms partnerships with brands, manufacturers, and agri-food suppliers, and verifies the authenticity and quality of the products. The platform stocks and ships goods to customers, unlike Alibaba’s massive C2C platform, Taobao, which does not hold inventory.

“Merchants” act like product ambassadors and promote goods in their social networks, including friends and acquaintances, a company spokesman told TechNode. To encourage the social aspect, he added, buyers are offered discounts for promoting products to their social network.

The model addresses a key weakness in rival Pinduoduo at present: the issue of product authenticity. Beidian develops relationships with manufacturers and brands, then authenticates the goods itself, a strategy that Shanghai-based Pinduoduo is also adopting as its reputation as a platform for counterfeits has proven hard to shake.

Zhou Jiajun, Investment Director for Sinovation Ventures said in an announcement Thursday that despite the density of players in the e-commerce market, Beidian’s growth figures “was beyond our expectation,” (our translation). The China-focused tech VC had avoided investments in retail businesses, but now says that it expects a profit-making period for e-commerce players in the WeChat ecosystem. Beidian’s cost structure adds a margin of safety, it added.

China’s social e-commerce market has become increasingly crowded. Hangzhou-based Yunji plans to raise $200 million in an US initial public offering (IPO) filed last month. According to market research firm Questmobile, the number of monthly active users (MAU) from Beidian surged 550% year-on-year to 13.29 million in March, more than double that of Yunji (5.87 million), but one-twentieth the size of Pinduoduo (272 million).

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Bitfinex lines up $1B in commitments for its token sale, shareholder claims

Bitfinex’s parent company iFinex has received $1 billion in hard and soft commitments for an Initial Exchange Offering, according to a report by …

Bitfinex’s parent company iFinex has received $1 billion in hard and soft commitments for an Initial Exchange Offering, according to a report by CoinDesk, citing a WeChat post from a Bitfinex shareholder. According to Dong Zhao, an OTC trader in China who owns Bitfinex shares, there’s “a high possibility Bitfinex will not conduct a public sale” for its tokens. Zhao told CoinDesk that the exchange has received $1 billion in both hard and soft commitments for LEO, the name of Bitfinex’s exchange token. Soft commitments give investors the option of backing out of the deal.

This news comes after Bitfinex publicly released its white paper, detailing the inner workings of its LEO token and the token sale. Additionally, the white paper offered a glimpse at various projects Bitfinex is working on including Bitfinex Derivatives, exchange ecosystem EOSfinex, and iFinex IEO Platform.

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WeChat Bans Merchants from Dealing in Cryptocurrencies

WeChat, one of the leading messaging applications in the world have just released new terms and condition preventing its merchants from dealing in …

WeChat, one of the leading messaging applications in the world have just released new terms and condition preventing its merchants from dealing in any form of digital currency.

The firm released a new policy that forbids merchants who use its services from dealing in crypto at the end of April 2019.

“In the course of making payment transactions, you should strictly abide by the policies and regulations related to the online banking business and credit card transactions of the People’s Bank of China,” says the new policy.

“You may not directly or covertly engage with… token issuing financing and virtual currency trading platforms.”

According to the press release, the new policy will take effect on the 31st of May 2019. The new policy is said to only affect merchants which means that users who use WeChat are not affected by the new policy.

This new policy is coming at a time when the Chinese authorities are trying everything possible to eradicate cryptocurrency trading and mining. The Chinese authorities have also recently banned ICOs and major exchanges from trading in the country.

Rumour has it that the state is hoping to create its own digital currency for its populace that can be effectively regulated. This is to prevent security breaches, hack and investment theft that is plaguing the industry.

Chinese authorities hope that its currency will help the country maintain certain trade policies. They also believe if cryptocurrency is allowed, it could devalue the Chinese Yuan because it will give the Chinese people the opportunity to transfer money out of the country.

In China, WeChat, on the other hand, has more than a billion users making it a huge factor in deciding the country’s crypto industry.

WeChat users use the platform payment system services created by several merchants to buy and sell a digital asset on the application.

According to the new policy, payment merchant who refuses to adhere to the new rule and still continue to accept cryptocurrency for payment will be banned once the policy comes into effect.

Regular users of WeChat are however allowed, at least for now to continue using their digital assets to transact between one another. While anyone buying digital assets with the app P2P payment service may not be allowed to do that.

Cryptocurrency users must nevertheless be careful while transacting on the app in China given the consequence they might face from the Chinese authorities.

Expert also believe that if the policy remains as it is now, WeChat might find themselves going down the pecking order, losing their already attained market share and struggling to lift itself back into the instant messaging app space.

On the other hand, there is little or nothing they could have done since the Chinese authorities have registered their desire to ban these digital currencies. The better ways to deal with this is to compromise and hope that their payment merchant understands their reason for the new policy change.

Source:https://www.financemagnates.com/cryptocurrency/news/wechat-bans-merchants-from-dealing-in-cryptocurrencies/

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Facecoin? Cryptocurrency Push for Facebook Gathers Steam

Other cryptocurrencies, specifically Ripple, have been designed to facilitate low cost cross-border payments, but it’s clear Facebook doing something …

The most likely answer is ‘yes’. Although, “Facecoin” (the name has been applied by the press, rather than Facebook) is expected to be fixed against a major currency, like the dollar, or perhaps a combination of major currencies. The idea is that the cryptocurrency will not be subject to the volatility that can attract Bitcoin traders looking to make fast profits.

Indeed, while there has been lots of media speculation over Facebook and cryptocurrency, more fuel has been added to the fire when the Wall Street Journal recently reported that Facebook was actively recruiting financial firms to start exploring a viable route to developing the cryptocurrency for the social media platform.

Part of the reasoning applied to this move by Facebook is transform its payments platform, allowing its users to buy the new token, and use it to make payments across Facebook and other internet sites. For Facebook the attraction might come with the elimination, or lowering, of processing fees by traditional payment companies.

Low cost cross-border payments could be key

At the moment, transaction fees are quite low – almost costless – with traditional payment methods if those transactions are end-to-end in the same currency. It becomes expensive at the point of exchange from one currency to another. That’s especially important in a region like Africa, and a crypto-payment that helps money flow in cheaply from abroad could be significant.

Other cryptocurrencies, specifically Ripple, have been designed to facilitate low cost cross-border payments, but it’s clear Facebook doing something similar could provide access on a completely different scale.

Yet, media reporting has stopped short of saying that Facebook’s payment system will be anything like, for example, WeChat Pay, the Chinese-backed internet payment solution that allows scanning an instant payment through smartphones. It’s been a social phenomenon in China, with the media focusing on the slogan, “even beggars have QR codes.” But it should be noted that WeChat Pay still relies on traditional banking, not using any cryptocurrencies.

Obviously, Zimbabwe has its own challenges with regards to an innovation like this, and it’s not as if people will be pinging Facebook tokens to each other on the streets of Harare. However, these types of innovations, especially if Facebook is able to stabilize the value of the token, could be embraced in Zimbabwe and other parts of Africa which have been hurt by hyper inflation in the past.

Of course, all of this is still just speculation. We are still waiting for Facebook to clearly define its goals for cryptocurrency. But as it stands, don’t expect the excitement over “Facecoin” to die down any time soon.