Bitfinex's LEO
This post was originally published on June 11, 2019, and sent to Messari Pro subscribers.
Late last week, it looked like the hacker from the 2016 Bitfinex hack reportedly tried to move funds from one of his primary wallets. According to blockchain tracking service Whale Alert, a total of 172.54 BTC (~$1.3 million) moved from the hack wallet in a series of transactions late Friday. This was a small fraction of the 119,756 BTC stolen in the original Bitfinex hack (worth some ~$66 million at the time but a whopping ~$926.8 million at today's prices), but the timing of the transfers raised an interesting question.
Why did these coins finally move after three years of inactivity? The coins weren’t moved to a known exchange address, so it seems unlikely the hacker attempted to cash out via a traditional liquidity source. Instead, some wondered if the move was related to a new feature of Bitfinex’s recently released LEO token.
What is LEO?
Unus Sed Leo ($LEO) is an exchange token issued by Bitfinex. Though not explicitly mentioned in the whitepaper, Bitfinex conducted the IEO on its platform last month to raise money following the revelation that some $850 million in Tether reserves had been seized thanks to a compromised shadow banking counterparty.
The LEO white paper mentions “repayment of indebtedness and other recapitalization activities” as a potential use of proceeds, making it likely that a decent portion of the $1 billion raised could go towards covering lost funds.
