Dr. Doom posted on August 28, 2019 19:12:37
The entire cryptocommunity is very skeptical of the organizations that have launched LEO, the parent company that controls Bitfinex and Tether. Tether is very distrusted because unbacked USDT and the token sale for LEO was mostly to cover for "lost funds" up to $1 billion and according to documents from a lawsuit with the NYAG, Bitfinex was very short on cash due to the funds that according to them were seized.
It needs to be said however that a lot can be said about Bitfinex, but they are still operating after many years despite all the accusations and that they are very creative in finding solutions for extreme problems, of which losing banking relationships is a very common one among Crypto exchanges. Bitfinex seems to be wanting to stay clear of government overreach, and fights back against regulators. From a libertarian point of view (which is supposed to be one of the common values on which the philosophy behind bitcoin and cryptocurrency is based on).
In fact LEO is a simple ERC20 token that has many similar features as many other exchange tokens, with some extras as well. There is also the promise that if Bitfinex gets the seized funds back (and I believe also funds from another hack), this will be used to buy back and burn LEO tokens. Bitfinex has already started a token burn program, because they have committed to use part of the revenue to buy back LEO regularly. Because Bitfinex wants to ensure itself US citizens can't get any tokens on the exchange (Bitfinex has banned US customers), there is a KYC process on the exchange for those that wanna trade it.
Just like any exchange token, its existence and value proposition depend completely on the management of the exchange itself. Failure of the exchange itself or its mission for the token, will determine the fate of LEO.
Determining if LEO is a scam, depends entirely on anyone's opinion if Bitfinex is a scam operator. Sure enough the exchange is very controversial, however they have been fighting and no one can deny it has built up a track record and some resilience after the many battles it has fought (including a major heist). Even after it came out that USDT was only less than 75% backed, the market hardly cared and it turned back to trading near 1:1 with the dollar.
Therefore I can't really say whether it leans shady or legit, a case can be made for both sides as demonstrated before, so I have to keep it Neutral. Personally I am reasonably confident in the survival of Bitfinex and that they will make a legit effort to make their LEO token a worthwhile investment, though I don't see it ever becoming a 10x token, but it has more potential to outperform the great majority of existing shitcoins out there. I would not be uncomfortable if I had a small position in this token, although some patience is probably required before things come to fruition with its price development.
LEO is just a speculative "investment" that might serve as diversification from the bulk of the crypto market, and has the potential to move less correlated with the market (similar to the direction BNB has had for its first year after conception). But nothing more than speculative. And keep in mind: if Bitfinex shuts down, collapses, exits or whatever, you can expect LEO token will instantly become pretty much worthless. It is pretty remarkable that the coin is so high on CMC (#13 currently), but that is mainly because it raised such an enormous amount of money, which keeps its marketcap pretty high right from the start; also keep in mind that the trading volume is among the lowest in the top 20 coins.
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