Bitfinex, which faces ongoing legal scrutiny from authorities who accuse it of losing $850 million, had hinted it would seek to sell its own tokens earlier this month.
Investors will be able to use to tokens for various on-exchange activities, while Bitfinex, if the entire supply is sold, will plug the gap left by the missing funds.
May 11 will marks the cut-off point for sales to private investors, while a public phase may begin afterwards.
“If fewer than 1 billion USDT tokens are sold by private token sale, the Issuer may thereafter sell remaining tokens at times and in a manner it deems appropriate in its sole discretion, consistent with applicable law,” the whitepaper confirms.
IEOs are becoming slowly more popular among exchanges in 2019, with platforms eager to keep token sales in-house and increase control of the process.
As Cointelegraph reported, the first IEO began in April, while previously, controversy arose over plans by exchange Bgogo to conduct a sale involving IOUs for third-party tokens which did not in fact exist.