$1 Billion in Commitments Already Made for Bitfinex's Token Sale, Shareholder Claims

IFinex, Inc., the parent company which manages the operations of both its subsidiaries, Tether Ltd. and embattled crypto exchange Bitfinex, has reportedly acquired $1 billion in “hard and soft commitments” for its initial exchange offering (IEO).

This, according to a Bitfinex shareholder familiar with the matter, who revealed that there’s now a “high possibility” that the exchange operator “will not conduct a public sale” for its crypto token offering, known as LEO.

Hard And Soft Commitments Have Now Reached $1 Billion

Dong Zhao, a prominent Chinese shareholder and large volume over-the-counter (OTC) crypto trader, posted a message on WeChat (a popular Chinese social media network) which stated that the IEO had already received enough commitments to meet its fundraising target of $1 billion.

In statements shared with Coindesk, Zhao noted that the soft commitments received from investors meant that the potential USDT investments had not been locked in, which leaves the option open for backing out from the deal.

Investors Interested In Token Sale, Despite “$850 Million Missing”

Although Bitfinex’s management has still not raised adequate funds to meet the $1 billion fundraising target, the recent update from Zhao reveals that there’s considerable interest in acquiring LEO tokens.

This, despite Bitfinex being accused by the New York Attorney General’s (NYAG) Office of losing $850 million due to mismanagement of funds by Crypto Capital, the exchange operator’s payment processing service provider. The missing funds have reportedly been seized by government officials in Poland, Portugal, and the US. However, it is still unclear exactly why (or if) the funds are being held by authorities.

$20 Million Committed By Renrenbit Users

According to Zhao, his company has made a “hard” commitment by investing in Bitfinex’s IEO, however the Chinese entrepreneur did not disclose the amount invested. At present, Bitfinex’s management has not confirmed exactly how much it has received in investments.

Zhao also claims that users of his crypto-lending app, Renrenbit have so far invested $20 million (hard commitments).

On May 8th, 2019, IFinex announced the release of its whitepaper which confirmed that Bitfinex’s management was seeking to raise up to $1 billion through an IEO. The whitepaper also revealed that IFinex had made net profits of over $700 million during FY 2017/2018.

As explained in the whitepaper, if less than 1 billion LEO tokens are sold, iFinex may sell the remaining tokens after this token sale has concluded.

Bitrue Hacked: $4.5 Million in XRP and ADA Stolen, User Funds Will Be Replaced

At around 17:00 UTC on June 26 or 01:00 on June 27 in Singapore, where digital asset exchange Bitrue is based, a security breach occurred, which resulted in a loss of $4.5 million in crypto from the exchange's hot wallets.

Bitrue, which was founded in 2018, has quickly become a favorite with members of the XRP community because of the high degree of enthusiasm, support, and transparency shown by its management towards XRP. One interesting fact about Bitrue is that it supported XRP as a base currency on the day that its trading platform was launched (19 July 2018). 

At press time (07:57 UTC on June 27), visitors to the Bitrue website are greeted with this message:

Bitrue Hack Announcement.png

Around 02:16 UTC on June 27, Bitrue issued an official statement (via a series of tweets) that explained what exactly had happened, how this impacted its users, and what it was going to do next:

  • At approximately 17:00 UTC on June 26, a hacker or group of hackers "exploited a vulnerability" in the exchange's "Risk Control team's 2nd review process" to "access the personal funds of about 90 Bitrue users."
  • The hackers "used what they learned from this breach" to steal around $4.5 million in crypto—more specifically 9.3 million XRP and 2.5 million Cardano (ADA)—from the exchange's hot wallets and moved these coins to various other exchanges.
  • Shortly after the security breach, this attack was detected and trading, withdrawals, and deposits were all suspended on Bitrue, and the three exchanges where the stolen funds were moved to—Huobi Global, Bittrex, and ChangeNOW—were alerted and asked to freeze "the affected funds and accounts." Bitrue has also "contacted the relevant authorities in Singapore to assist us in tracking down the culprit and retrieving the stolen funds."
  • Because initially it was not quite clear what exactly had happened, the message shown above (about "system maintenance") was posted on the Bitrue website... Bitrue wishes to apologize for "this miscommunication" with its users.
  • Bitrue wants to reassure its users that all "heir personal funds are insured, and anybody affected by this breach will have their funds replaced by us as soon as possible."
  • Bitrue is currently "conducting an emergency inspection of the exchange and hope to be live again as soon as possible with log in & trading functionality." As for withdrawals, they will be "offline for a slightly longer period" while the investigation continues.
  • The flow of stolen XRP can be tracked via the XRP Ledger tool at Bithomp: https://bithomp.com/explorer/rwSvajJ4ZNhjgzcfaJWkEuLh4VURTFHuka

In communication with CryptoGlobe, Bitrue's support team confirmed that:

  • all user funds are "insured up to a maximum value of 1 million USD per user"; and
  • "trading should be back up within a few hours, and at that time users who were affected will already have their lost funds back in their accounts"

A few hours ago, Bitrue CEO Curis Wang posted this message on Twitter:

UPDATE (08:15 on June 27): Bitrue has just released a statement to media outlets to provide further details about this incident:

  • Of the $4.5 million in stolen crypto, 50% was "moved to private wallets," and the other 50% was moved to five crypto exchanges: Huobi, Bittrex, ChangeNOW, Exmo.me, and Coinswitch.co. The first three have frozen the stolen funds that were moved there (worth around $1.35 million). 
  • "This frozen amount should be recoverable by Bitrue in the future after working with the authorities and exchanges."
  • "After recovering the frozen assets, the net loss will be $3.15 million USD." This total "includes $1.89 million USD lost from individual user accounts, and $1.26 million USD lost from Bitrue’s own hot wallet."
  • "The funds lost by user accounts were insured and will be replaced by Bitrue as soon as the exchange resumes service."
  • "Bitrue plans to re-enable log in and trading services by midnight (Singapore time) June 27, i.e. by 16:00 UTC on June 27.
  • "Withdrawals from the exchange will not be possible until the Bitrue team is confident that any security vulnerabilities have been addressed."
  • "Bitrue will continue the planned launch of the trading of their platform token, Bitrue Coin (BTR), on Sunday 30 June 2019."
  • "Bitrue will analyze their automated systems and manual processes to identify any potential vulnerabilities and patch them before they can be exploited."

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