Despite the recent controversy embroiling Bitfinex, the Hong Kongese crypto exchange is now considering to launch an exchange token, one of its major share shareholders, Dong Zhao, revealed.
Zhao said that he pitched the idea to the exchange’s executives and is asking for suggestions from the crypto community on the plan on Weibo. He later confirmed to Coindesk that the exchange is already considering to implement the plan. Zhao is a well-known over-the-counter trader in China and also founded a blockchain investment firm called DGroup.
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“If Bitfinex takes this opportunity to issue a platform coin to deal with the crisis, I wonder how many people will choose to continue to believe and support Bitfinex this time?” Zhao wrote on Weibo, the Chinese alternative for Twitter. “My suggestion to Bitfinex is to send a platform coin, corresponding to the frozen $850 million, only to recover the corresponding USDT, and give the supported users a corresponding return. The issuance mechanism can refer to the fee destruction mechanism of other platform currencies.”
However, at this stage, the details of the plan are not known.
The huge allegation
Bitfinex was recently accused of hiding $850 million in losses from its shareholders by using funds from Tether’s cash reserves by the New York Attorney General’s office. The exchange, however, denied all allegations and stated that the investigation was done in “bad faith and [is] riddled with false assertions.”
In recent months, exchange-issued coins gained massive popularity and the trend of initial exchange offerings (IEOs) have fueled this adaption. Binance Coin has recently become one of the top gainers in the market – it even strengthened its place among the top ten coins in terms of market cap.
Zhao also pointed out that exchange-issued tokens have “better liquidity” and believe that if Bitfinex finalized the decision, it will definitely gain from it.
“The issuance method could be similar to that of other exchange tokens, which were distributed through pre-paid trading fee packages,” he told Coindesk.