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Scandal-Ridden Bitfinex Launches Initial Exchange Offering Platform

P. H. Madore
Embattled crypto exchange Bitfinex is supporting initial exchange offerings (IEOs) in a newly launched platform. | Source: Shutterstock

By CCN: Despite an ongoing investigation by the State of New York, Bitfinex is heading leaning into the current bullish market trends with its second new offering in recent months. Tokinex is an “initial exchange offering” platform the company announced early this morning US time. Bitfinex says the product has undergone significant testing and will offer “carefully curated, pre-vetted” tokens from “quality” crypto projects.

ICO – STO – IEO

The concept of the Initial Exchange Offering was born of the ICO boom of 2017 in the form of Binance, which created Binance Coin both as a fundraiser and a utility token for its users. Later IEO tokens have encouraged “transaction mining,” where users earn tokens by wash-trading. In turn, that increases the volume of the exchange in question but demonstrates no meaningful trading activity.

Bitfinex says they are adapting to a changing market. Without mentioning Binance, who have turned the exchange world on its head through the launch of its own blockchain, the embattled, veteran exchange writes:

“What it means to be an exchange has evolved to become an entire ecosystem, not just limited to the remit of trading digital assets. We are proud to finally launch Tokinex and bring the opportunity for participation in quality token sales in a fair environment.”

Tokinex will have its first token sale on the 13th of June. “Qualified” users will be able to participate. Tokenized projects that use Tokinex will only pay a fee if they are “successful,” which would seem to mean they hit their fundraising goal.

The Next Altcoin Wave Will Be Exchange-Backed

Initial Exchange Offerings and Security Token Offerings are the watchwords of the next altcoin wave. They vary only slightly from their predecessor, the Initial Coin Offering, which was born long before 2017. The ICO organically grew as a way to fund development for new blockchains through premining.

Users would send Bitcoin or Litecoin in exchange for a predetermined amount of coins from the new blockchain. The overwhelming majority of projects that have funded via ICO have ultimately failed and lost value for their investors. Further, very little innovation ever took place using this method in the early days.

Read the full story on CCN.com.