Beleaguered Bitfinex Says Its Crypto Exchange Turns 97% Profit
Beleaguered Bitfinex Says Its Crypto Exchange Turns 97% Profit
(Bloomberg) -- Bitfinex is giving potential investors a peek into just how lucrative it can be to operate a cryptocurrency exchange.
The controversial digital-asset trading platform disclosed in a so-called white paper that IFinex Inc., the company’s closely held parent, had a net profit of $404 million last year on $418.2 million in gross profit that includes consolidated revenue. Bitfinex disclosed the tidbit as it seeks to raise up to $1 billion in an initial exchange offering from non-U.S. investors after allegedly losing as much to a banking provider.
New York’s attorney general accused Bitfinex and its affiliate Tether Ltd. last month of participating in a cover-up to hide losses of about $850 million. The allegations revived doubts over the stability of the Tether stablecoin, which is one of the world’s most widely traded virtual currencies. Bitfinex contends the funds haven’t gone missing but have been seized by government authorities.
Bitfinex is trying to raise funds through a sale of tokens dubbed LEO, which will give holders discounts in using the exchange’s services. The Hong Kong-based company said that it will use at least 95% of recovered funds from the government seizures to repurchase and burn the tokens within 18 months from the day of recovery.
The white paper says the company had a staff of between 60 to 90 people and expenses amounted to about $14 million last year. Shareholders received dividends of $261.7 million in 2018, after being paid $246 million the prior year, the document said.
Oh, and the paper also says that all the financial data is unaudited and hasn’t been prepared in accordance with the generally accepted accounting principles of any jurisdiction.
To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net
To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Andrew Dunn
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