As of late, Bitfinex – the popular cryptocurrency exchange that’s also tied to the stable currency Tether – is trapped in a scandal after the New York Attorney General’s office accused the company of covering up a near $900 million loss in 2018.
Despite the Scandal, Bitfinex Has Big Plans for the Future
Live Bitcoin News reported on this story several days ago, but the troubles aren’t over yet for the crypto exchange or its stable currency. However, the company has already seemed to put the past in the past and moved onto other projects, including working to receive $1 billion in funds for a new token it plans to produce.
It’s hard to tell if Bitfinex is being very brave or very foolish. Does it think investors are going to simply look away without considering the dark cloud that still hovers over its operations? Does it think its reputation is solid enough to make everyone turn the other way?
In any case, Bitfinex is on a mission. It’s looking to create a new token by the end of 2019, and it needs money to get things off the ground, so that’s what it’s after.
Bitfinex wants to raise roughly $1 billion in Tethers to create what it has dubbed the “LEO coin.” This coin, it claims, could rebuild its cash reserves and fully back the Tether stable currency. At press time, the company only has about 74 percent of its total reserves in place, and it wants to move back to 100 percent, so its customers can sleep easily at night.
Jeff Dorman, chief investment officer at Arca Funds in Los Angeles, California, claims:
If Bitfinex successfully raises this capital, and all signs thus far point to them succeeding, investors in these new LEO tokens will likely be rewarded. With the capital hole filled, BItfinex and Tether will likely continue to operate with a well-deserved reputational black eye… We understand that there are a lot of people who want this to fail, to help remove an unregulated exchange and a loosely regulated stable token, but it’s simply a reality that people move on from scandals, and companies who remain solvent get to continue operating.
People Forgive and Forget
To an extent, Dorman is right. People do seem to move on from cases like this, especially in the crypto world. In fact, if one were to examine the crypto space and look at just how much fraud, theft and other malicious activity has occurred in just the last year-and-a-half alone, it’s surprising that anyone continues to delve in it.
Recently, Live Bitcoin News reported that more than $1.2 billion in crypto funds have been lost to theft and cyberattacks over just the last three months, yet crypto remains as popular as ever.