Bitfinex begins LEO token buyback, maintains no wrongdoing in $850 million shortfall

Cryptocurrency exchange Bitfinex announced the launch of a transparency initiative to coincide with the beginning of the burn mechanism of the company's LEO token.

Bitfinex's parent company iFinex sold $1 billion in LEO tokens for USDT from private investors during a 10-day token sale in May 2019 to cover an $850 million loss from Crypto Capital.

Bitfinex is able to raise 1b USDt in 10 days, in a private sale.

Bitfinex created a continuous token burn mechanism that will buy back an amount of LEO tokens worth a minimum of 27 percent the revenue of iFinex and its subsidiaries.

The buyback program began on June 14 and is programmed to burn LEO tokens every 3 hours.

Gross revenues from iFinex will be allocated toward the purchase of LEO tokens at market rates until 100 percent of the tokens have been burned.

The UNUS SED LEO Transparency Initiative consists of an "LEO Transparency Dashboard" providing real-time insights on the amount of funds collected for the buyback and LEO tokens that remain in circulation.

The burn mechanism will initially be funded with revenue from LEO tokens used to pay for trading fees on Bitfinex.

iFinex says it will expand the effort to include money from all revenue streams, including funds recovered from Crypto Capital, and 80 percent of the funds recovered from the 2016 hack of Bitfinex.

"In order to fill the gap, executives of Bitfinex and Tether engaged in a series of conflicted corporate transactions whereby Bitfinex gave itself access to up to $900 million of Tether's cash reserves, which Tether for years repeatedly told investors fully backed the tether virtual currency"1-to-1.".