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Joseph Lubin Says the Bitfinex-Tether Mess Will Linger on Despite Bitfinex Announcing Huge Profits

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Bitfinex profits

Bitfinex exchange has come out to show potential investors how profitable it can be to run a crypto exchange. The hard-pressed crypto trading platform shared a “white paper” that shows its parent firm, Ifinex Inc made a net profit of $404 million. According to the whitepaper, Ifinex’s gross profit was $418.2 million. Bitfinex unveiled these enticing figures as it aims to raise $1 billion in an initial exchange offering (IEO). The firm’s token sale will be open to qualified non-US citizens.

The whitepaper discloses that the token’s name is LEO and its value is equal to one Dollar. Bitfinex notes that LEO holders will benefit from discounts when using its services. The exchange added that it would use 95 percent of the funds recovered from government authorities to buy-back the tokens within 18 months from the day of recovery.

On top of this, the whitepaper unveiled that Bitfinex had a workforce of 60 to 90 individuals last year. The exchange allegedly used $14 million throughout the year. The document also stated that Bitfinex shareholders got dividends worth $261.7 million last year. This figure rose from $246 million in the previous year.

Bitfinex Accused of Using USDT’s Reserves to Cover up an $850 Loss

This news comes after the exchange lost $850 million of investor funds. The New York Attorney General’s office (NYAG) accused Bitfinex and its partner Tether Ltd of teaming up to cover the loss of the funds. According to NYAG, there is $850 million worth of USDT frozen in Tether’s reserves. This implies that the stablecoin is not fully backed by the US Dollar.

 These claims invigorated doubts over tether’s (USDT) instability. USDT is one of the most traded crypto coins. It serves as a hedge against volatility in the crypto market. Bitfinex has maintained that it did not lose any funds. Per the exchange, government authorities seized the $850 million.

Ethereum Co-founder Says Bitfinex Mess Won’t Go Away Soon

Reportedly, Joseph Lubin, Ethereum’s co-founder believes that the Bitfinex-Tether mess will not get any better. He said this during the Fluidity Summit Conference in Brooklyn.

Echoing NYAG’s sentiments, Lubin said,

Tether is somewhat important to our ecosystem because it’s used by different institutions to effect more fluid trading. There are other price-stable tokens out there — many others — and I think they’re going to gain traction because of this. I think that will be a really good thing.

He added that aside from Tether, all crypto prices are altered. Lubin noted that resourceful characters can get in the crypto space at any given time and do something that will change prices in their favor. In conclusion, Lubin called for the crypto community to strive in building better systems.

Do you think Bitfinex will be successful in raising $1 billion through its token sale? Let us know in the comments below.

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