Hong Kong-based exchange Bitfinex may soon issue a proprietary exchange , according to a shareholder of the platform claiming knowledge of the plan.
Dong Zhao, a well-known over-the-counter trader in who holds a stake in Bitfinex, who first announced the on , told CoinDesk that the exchange is indeed planning the issuance, although the “details are not 100 percent confirmed.”
Bitfinex has not responded to a CoinDesk request for comment as of press time.
It’s unclear at this stage how the plan would play out or what exactly participants in an exchange offering would be promised. However, if confirmed, the claim is notable as it comes soon after from the New York Attorney General’s office that Bitfinex lost $850 million in customer and corporate funds.
Subsequently, the attorney general said, Bitfinex then secretly arranged a $900 million loan from the exchange’s affiliated company Tether, which issues the tether (USDT) stablecoin, to cover the shortfall.
Bitfinex later claimed that the $850 million had been “seized” by various authorities and that it was working to retrieve the funds.
Zhao, who is also the founder of investment firm DGroup, said it was he who suggested the plan to Bitfinex. On April 28, days after the New York AG’s allegations, he on his Weibo account that the exchange should take the opportunity to issue worth $850 million to bring in tether equal to the frozen amount. Participants would get the exchange in return.
He told CoinDesk that the advantage to users is that “exchange have better liquidity. They are the only real that is not a shitcoin.”
“The issuance method could be similar to that of other exchange , which were distributed through pre-paid fee packages,” he said, and later he would do his best to make the deal happen.
Zhao’s has had a mixed reception on Weibo, with some skeptical on whether Bitfinex is indeed able to recover the frozen funds.
“Didn’t Bitfinex say [there] are certain the funds can be recovered? If so, then no other plans are needed. But if they issue to swap debts to shares, that could mean those funds are really gone and could lower the platform’s credibility,” one user commented.
Last Friday, Zhao that Bitfinex’s chief financial officer told him the frozen $850 million would be recovered “within a few weeks.”
Dovey Wan, founding partner of fund Primitive, has also raised several inconsistencies regarding public information about Bitifnex and Tether so far.
For instance, in one that also noted Bitfinex’s exchange plans, she said, “if the $850 million can be easily crawled back, then why [would it do] initial exchange offering?” and “if Bitfinex is highly cash flow positive, why borrowed from Tether?”
image via Shutterstock
Published at Tue, 30 Apr 2019 08:19:27 +0000
