Update On Bitfinex Backed Unus Sed Leo Token (LEO)

LEO 24hr volumes on BFX are now under USD 70M equivalent
LEO tokens have a buyback mechanism 
The offering limited many regions' participation such as the US and Canada
Crytpo and Bitcoin Market Cap Story of Day

Crytpo and Bitcoin Market Cap Story of Day

CRYPTO MOVERS AND PRICES

 

 

CRYPTO STORY OF THE DAY

It Has Now Been 5-Months Since The Bitfinex-Backed Unus Sed Leo Token (LEO) Began Trading, We Provide An Update - It Has Been A Volatile, Up And Down Ride For The Exchange Token

As a reminder, the LEO token was born in response to the New York Attorney General's lawsuit against Bitfinex (BFX) which threatened to eliminate the exchange's ability to borrow from affiliated stablecoin Tether (USDt). The loans, which the order looked to stop, were made as BFX experienced a client funds shortfall as one of the exchange's primary payment processors, Crypto Capital, made USD 850M of client funds inaccessible for reasons that still remain unclear. To ensure liquidity the company launched a $1B token sale of LEO. Similar to other exchange tokens, LEO tokens have a buyback mechanism which states that 27% of iFinex (parent) revenues will be used to 'burn' the tokens (the buybacks can be monitored here). Furthermore, were the Crypto Capital funds ultimately recovered at least 95% of the net funds would be used to further buyback LEO tokens. The offering limited many regions' participation such as the US and Canada and immediately traded higher following their listing at 1.00. The tokens would ultimately trade as high as $2 within weeks. However, a string of negative events such as the NYAG's lawsuit not going away, little information around the Crypto Capital recovery and a new lawsuit (albeit seemingly frivolous) citing over USD 1T in damages have brought the tokens back to and at times below their initial offering price.

Crypto Takeaway: In addition to the issues mentioned, BFX is now hosting a fraction of the volumes they were in some periods in 2017 & 2018. For example, 24hr volumes on BFX are now under USD 70M equivalent where that figure would frequently read over 1B in 2017/2018. Reverse-engineering LEO buyback rates and annualizing the last 24hr activity levels would imply 30M in annual revenues for iFinex. Those figures had been reported to be closer to $500M in peak periods. BFX shares traded on BNK To The Future have also fallen since December 2018. At their peak, the stock was trading near $16, implying a market cap of USD 2.8B for the company. The shares have since fallen a staggering 84% to imply a market cap of USD 440M.

About the Author

FRNT Financial is an Institutional Brokerage which offers clients a variety of products along with research & analytics in the crypto-space.