Bitfinex Releases IEO Whitepaper, Claims $404 Million Net Profit in 2018
Under fire cryptocurrency exchange, Bitfinex, has released a claiming they turned a $404 million net profit in 2018, as by Bloomberg on May 9, 2019. The information provided is not backed by evidence as the exchange only revealed select data from their financial statements.
Bitfinex Addresses Insolvency Claims
In a whitepaper issued about their new IEO offering, , Bitfinex has rubbished claims of alleged insolvency by claiming they were able to turn a huge profit in 2018. The exchange has been in constant controversy for the last two weeks after the New York State Attorney General against them and the Arizona State Attorney General filed for a on Crypto Capital linked businessman, Reginald Fowler.
The exchange revealed a consolidated gross profit of $418.2 million for iFinex Ltd, meaning their total expenses amounted to a mere $14.2 million. Dividends paid out to shareholders was roughly $262 million in 2018; a 6.5 percent increase from 2017.
iFinex is raising a billion dollars in their IEO which is roughly the same amount the NYAG alleges they lost to payment processor Crypto Capital. In the document, they claim to utilize 95 percent of recovered funds to burn tokens they issue.
In order to entice potential investors, Bitfinex is interesting a special equity clause in their tokens. With a tradable Recovery Right Token (RRT), holders of the token will be able to convert their Bitfinex tokens into shares of iFinex.
Significant Pressure Mounting
After the FBI a portion of their funds, Bitfinex has gone into disaster recovery mode to prevent collateral damage from the events. The IEO and their cold wallet sell off is sufficient evidence to claim that Bitfinex is lacking liquidity. Fiat withdrawal claims are piling up on the exchange as customers do not want to buy for a – they would rather get their cash; this led to CoinMarketCap excluding Bitfinex’s weight on bitcoin price from their calculation.
Bitfinex is attempting to realign its public image, which has been under fire since the launch of Tether in 2017. The whitepaper is likely to be a tactic for them to convince the crypto community they are doing their best to work with authorities and mitigate legal risk while raising capital to better the operational efficiency.
It’s going to be a long and tough road for Bitfinex to repair it’s s reputation with people already comparing the current situation to pre-bankruptcy Mt. Gox.
On Thursday, the smart contract protocol reached its millionth transaction. bitcoin Magazine received an update on the status of the project from Shawn Leary, the newly elected Counterparty community director.
Counterparty was launched in January 2014 with the creation of its native currency, XCP. Unlike typical ICOs (initial coin offerings) today that transfer funds to the founders, XCP was created by “burning” bitcoins, whereby bitcoins were sent to a special address (one for which no one owned the private key) that rendered them unspendable. Those who destroyed their bitcoins in this manner in return received an amount of XCP in proportion to their bitcoins lost.
This “proof of burn” process put all bitcoin users, including the founders, on an equal footing in terms of obtaining the native XCP token. According to Leary, the Counterparty team hopes that its unique founding sets the tone to attract new projects that won’t take advantage of users’ funds.
“We want to continue this legacy and hope it wards off scams and attracts genuine projects that use our protocol for what it was intended: decentralized markets,” said Leary.
Counterparty doesn’t have its own blockchain; rather, it exists entirely via the bitcoin blockchain. All actions taken on Counterparty are made through ordinary bitcoin transactions using XCP as the “fuel” that is spent. This means that Counterparty transactions are protected by the hashing power of bitcoin, so a double spend would require a 51 percent attack on the bitcoin blockchain itself.
Counterparty Project: More Than Games
Leary described an indie-game network that is “growing leaps and bounds around Counterparty.” This market is arguably where Counterparty has had its greatest impact. The first of these games to rise to prominence was , with its token launch in 2015.
Since then, many gaming projects have flourished on Counterparty. The currently has over 1,000 digital collectible trading cards registered via Counterparty for use in games such as SaruTobi Island and Rare Pepe Party. The augmented reality game has also successfully raised over $1,000,000 in bitcoins in a token sale on Counterparty of the in-game asset Databits, and even won investor Vinny Lingham’s support during an episode of . Augmentors is currently in beta and is planning for a launch in 2018.
But there is more to Counterparty than just games. Generally, Counterparty is helping anyone create digital assets with smart contract properties that are protected by the hashing power of the bitcoin blockchain.
For instance, Counterparty’s is aimed at rewarding those who provide computing power to Stanford’s project to aid in the study of diseases such as Alzheimer’s, Huntington’s, Parkinson’s and many cancers.
In collaboration with Storj, Counterparty developed Pico payments, which will be implemented to reduce the cost of microtransactions.
Probably their most widely used token, LTBCOIN, has been used by the LTB Network for a few years now. In fact, over 17 percent of all Counterparty transactions have been with LTBCOIN.
“Every protocol has its deficiencies and quirks,” Adam B. Levine, Editor-in-Chief of the Let’s Talk bitcoin! Show, said to bitcoin Magazine. “Counterparty is no different. What I like about it is that we’ve been building with it long enough that I understand those risks and challenges. We’ve already , like accepting dollar payments for tokens and giving token buyers the feeling of instant fulfillment when they’d otherwise be waiting for blockchain confirmations.”
The Scaling Debate: Preparing for What’s Next
The Counterparty team has not taken a definitive position on the various scaling proposals, but to run bitcoin Core. Leary told bitcoin Magazine that there are two routes Counterparty could take to account for a network fork. If Counterparty supports a hard fork in advance, they will “release a new version of Counterparty utilizing the new bitcoin client, and users must switch to this new bitcoin client as well as the updated Counterparty version before the specific bitcoin fork occurs.”
Alternatively, if a fork occurs that they did not account for ahead of time, they have the option to “freeze” Counterparty balances at a specific block height on the old chain and transition to a new chain at an indicated block height. In this case, “there would be some downtime, but the process would be announced well in advance with clear instructions provided for everyone.”
The team also emphasized that since Counterparty exists entirely through the bitcoin blockchain, there can be no such thing as a fork in Counterparty itself. Counterparty nodes do not need to coordinate with one another, since all nodes simply need to monitor the canonical bitcoin blockchain, whatever the Counterparty protocol defines that to be.
Continuing Improvements
Counterparty is still continually improved with development led by core maintainers Ruben de Vries and Devon Weller. There are currently two Counterparty Improvement Proposals (CIPs) outstanding, and . Both are aimed at reducing costs for transactions over the network. The team is also raising funds to upgrade .
Editor’s Note: The LTB Network is a property of BTC Media.
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