The LEO token can be modified by the controlling entity

The Cointelligence Analysis site analyzed the intelligent contracts underlying the LEF token issued by Bitfinex. Specialists claim that the token controlling entity has the ability to issue new tokens and destroy existing ones, no matter where they are stored.

The LEO Token

Bitfinex, one of the largest cryptos platforms in the industry, issued the LEO token in May. The company sold token $ 1 billion in private sale.

The decision to launch the LEO Token was based on the financial issues that the exchange had in recent months.

According to a lawsuit filed by the New York Prosecutor’s Office, Bitfinex was forced to borrow 850 million dollars from Tether.

After the judge ordered Tether not to borrow money from the exchange, the platform was forced to find alternative solutions.

Possibility of millions of dollars of fraud

Cointelligence breaks down the code parts that demonstrate how the token can be manipulated by the owner in any way. Thus, the controller contract allows the entity behind the token to transfer, issue, approve, burn and modify the token itself.

This unrestricted currency control could leave room for a multibillion-dollar fraud.

Bitfinex CTO Paolo Ardoino explained the options available in the LEO smart contract on Twitter:

“For security reasons and future prospects, we have left the opportunity to update the Token Contract. This is a key feature for a smart contract to work for many years. Issuing more tokens would not make sense for Finex … we have self-sabotage. “

For security and future proof reasons we have left the ability to upgrade the Token Contract. That’s really a key feature for a contract that could live a lot of years. Minting more tokens would not make sense for Finex … like shooting our foot.