Bitfinex chooses Kazakhstan’s AIFC for its regulated tokenized securities offering

Rick Steves

Bitfinex and sister company Tether have found themselves in legal trouble in the United States after years of instability regarding its true balance sheet.

Bitfinex Securities has launched its regulated investment exchange in the AIFC (Bitfinex Securities), aiming at increasing accessibility to a large set of financial products for members who wish to diversify their portfolio.

The AIFC, which reads Astana International Financial Centre, is a financial hub in Nur-Sultan (formerly Astana), Kazakhstan that officially launched on July 5, 2018.

In June 2020, the number of companies working with the AIFC reached 500 from 35 countries. Kazakhstan has become a favorite jurisdiction for Chinese Bitcoin miners who have been subject to an extensive crackdown earlier this year.

It thus comes as no surprise that Bitfinex decided to launch its tokenized securities offering from the AIFC jurisdiction.

“The Bitfinex Securities platform is designed to facilitate the raising of capital for issuers seeking to have their tokenized securities publicly traded through an easily accessible “admission to trading” process. This meaningful step for the industry will widen access to a variety of innovative financial products, including notably blockchain-based equities and bonds, along with investment funds”, said the official announcement.

“The Bitfinex Securities platform will be available 24/7, an established practice in the digital token space. Furthermore, as the platform will deploy leading-edge technologies to reduce costs, increase efficiency and optimize the success rate of capital raises, investors will obtain access to a low-cost, high performing and global security trading market”.

Cryptocurrency exchanges have been under pressure in 2021 as the institutional market enters the stage, prompting stronger scrutiny from regulators across the globe.

Bitfinex and sister company Tether have found themselves in legal trouble in the United States after years of instability regarding its true balance sheet.

Tether is supposed to always have the same real-dollar value, backed one-to-one by U.S. dollars in reserve, but iFinex — the operator of Bitfinex — and Tether have allegedly made false statements about the backing of the “tether” stablecoin.

The firms have also allegedly lied about the movement of hundreds of millions of dollars between the two companies to cover up the truth about massive losses by Bitfinex. The companies will have to disburse $18.5 million in penalties, in addition to requiring a number of steps to increase transparency. In the meantime, they will cease any further trading activity with New Yorkers.

“Bitfinex and Tether recklessly and unlawfully covered-up massive financial losses to keep their scheme going and protect their bottom lines. Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie”, said Attorney General James.

The NYAG ordered both firms to close operations in the state of New York.

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