Embattled cryptocurrency exchange Bitfinex confirmed it would conduct a $1 billion so-called initial exchange offering (IEO) in a whitepaper issued on May 8.
Bitfinex, which faces ongoing legal scrutiny from authorities who accuse it of losing $850 million, had hinted it would seek to sell its own tokens earlier this month.
The release of a formal whitepaper reveals few changes from the original rumors, with the sale of up to 1 billion LEO tokens, each worth 1 tether (USDT), lasting until May 11.
Investors will be able to use to tokens for various on-exchange activities, while Bitfinex, if the entire supply is sold, will plug the gap left by the missing funds.
May 11 will marks the cut-off point for sales to private investors, while a public phase may begin afterwards.
“If fewer than 1 billion USDT tokens are sold by private token sale, the Issuer may thereafter sell remaining tokens at times and in a manner it deems appropriate in its sole discretion, consistent with applicable law,” the whitepaper confirms.
IFinex, the parent company of Bitfinex and Tether, continues to contest the legal allegations in a United States court, with a judge on Monday partly siding with the co-defendants.
IEOs are becoming slowly more popular among exchanges in 2019, with platforms eager to keep token sales in-house and increase control of the process.
As Cointelegraph reported, the first IEO began in April, while previously, controversy arose over plans by exchange Bgogo to conduct a sale involving IOUs for third-party tokens which did not in fact exist.