UNUS SED LEO is a crypto token project of Bitfinex cryptocurrency exchange’s parent company, iFinex. The token launched through an initial exchange offering (IEO) in 2019 following the US government’s seizure of funds held by Crypto Capital, Bitfinex’s former payment processor.

The name “UNUS SED LEO” is derived from the Latin phrase “One but a lion.”

Not the first digital currency launched in iFinex’s tumultuous history, Leo is a dual-chain utility token housed on the Ethereum and EOS blockchains. Among the many unique aspects of the LEO project, it is one of the few cryptocurrencies with a limited life cycle built into its protocols.

In its IEO, the company was able to raise $1 billion in capital. Token holders receive discounts for trading on iFinex platforms.

Buybacks and burnouts

One of the unique features of the LEO coin is its intentionally limited lifespan. How does UNUS SED LEO work to achieve this? IFinex commits 27% of its gross revenue to a buyback scheme at prevailing market prices until no tokens remain in circulation. Since iFinex owns Tether, it should be assumed that this 27% figure includes revenue collected through Tether.

The white paper states that 80% of all BTC recovered from the 2016 hack will also go to the buyback scheme. Additionally, if iFinex ever recovers the funds lost from the ex-Crypto payment processor’s confiscation, 95% of the recovered funds are also earmarked for the buyback scheme.

Before we delve a little deeper, we need to learn more about the entities involved. iFinex and Bitfinex. First, Bitfinex is one of the oldest crypto exchanges, having launched way back in 2012. Even with its long history, it has faced numerous obstacles along its way, mainly caused by platform hacks.

Leaks, Hacks, and Controversies

To gain an understanding of the LEO coin project, it is important to understand the history of Bitfinex and Tether. Despite both entities claiming otherwise, the Paradise Papers leak revealed that Bitfinex and Tether are controlled by the same parent company – British Virgin Islands-based iFinex. Further controversy ensued when Bitfinex and Tether were accused of transferring hundreds of millions of dollars between each other to cover up Tether’s insufficient fiat reserves.

  • In February 2021, the New York State Attorney General stated that Bitfinex and Tether misled customers and the market by inflating their reserves, concealing approximately $850 million in losses. Fines of $18.5 million were imposed, and Bitfinex is currently banned from doing business in New York State. The two companies are also required to submit quarterly reports to ensure compliance with these prohibitions and proper business separation.
  • In 2016, the exchange was effectively shut down after a hacking attack that led to the theft of almost 120,000 BTC.
    After the hack, Bitfinex was forced to distribute these losses among all Bitfinex account holders by crediting customers with the specially created BFX token at a ratio of one BFX per $1. Creating tokens out of thin air to support financial losses may seem questionable to some; however, fortunately for the exchange, all BFX tokens were redeemed within eight months. In cooperation with the US government, the recovery of the stolen BTC continues to this day.
  • In 2016, the exchange also dealt with a fine from the US Commodity Futures Trading Commission (CFTC) for failing to register as a futures commission merchant, prompting a reassessment of its business practices.At the same time, US prosecutors accused parent company iFinex of illegally transferring funds to Crypto Capital Corp and trying to cover up $850 million in losses by covering them with Tether’s USDT reserves.

In response, iFinex announced the creation of the Unus Sed Leo token to cover Tether’s $850 million shortfall.

To make up for the lost money, iFinex revealed plans to gradually buy back the tokens from investors until there is none left in circulation. A transparency initiative was also launched so that the crypto-community can monitor the initiative’s progress and ensure that it is fulfilling its stated goals.

Benefits for UNUS SED LEO Token Owners

The benefits of owning UNUS SED LEO tokens include:

  • Saving commissions on Bitfinex. All fees for those who own the token will be reduced by 15% for all cryptocurrency pairs.
  • Monthly Discounts. Token holders receive a discount of 0.05% for every $10,000 in UNUS SED LEO tokens held in the merchant balance in the previous month. The maximum discount is 5%. Calculations are made taking into account every day of the month.
  • Discount when withdrawing cryptocurrency and fiat money on the Bitfinex exchange. Holders of more than 50 million UNUS SED LEO will receive up to a 25% discount when withdrawing cryptocurrencies. Also, exchange customers, who will have $50 million in tokens, can withdraw up to $2 million per month without additional fees. In addition, the additional commission will be reduced from 3% to 2% on every withdrawal of more than $2 million in fiat units per month.