RenrenBit, a China-based crypto peer-to-peer lending and wallet startup founded by well-known over-the-counter (OTC) trader Dong Zhao, has lined up commitments worth $21 million for its own token sale.

The lending platform kicked off the sale of 21 million RRB tokens on Monday, each priced at 1 USDT, the dollar-pegged cryptocurrency issued by Tether. It's yet another example of a notable Chinese crypto startup capitalizing on the craze of exchange platform tokens following the significant growth of Binance's BNB.

According to a notice posted on RenrenBit's mobile app, the sale was fully subscribed within about four hours with all 21 million RRB spoken for. The firm allows a two-day window for investors who might have second thoughts to withdraw their orders so the eventual amount raised could vary.

According to the white paper, RRB is an ERC-20 token that runs on top of ethereum and can be used to offset transaction fees for crypto-to-crypto and OTC trading on RenrenBit. It can also be pledged as collateral for the platform's crypto lending services. The firm said the token would initially be tradable on its own app.

The 21 million tokens in the public sale account for half of the total issuance. The other half will be held by RenrenBit's team, of which 2.1 million will be unlocked initially and available for trading.

Based on an ethereum address screenshot provided by Zhao, one of the company's ethereum wallets saw some $19 million worth of ERC 20-based USDT flocking in over the weekend. Prospective investors would first need to deposit at least 1,000 USDT into their RenrenBit account to prove eligibility.

Ordinary users with at least 1,000 USDT on RenrenBit were able to buy up to 1,000 RRB, while others with higher net worth investors could buy as much as 75,000 RRB.

The sale came just after RenrenBit revealed its $3 million Series A round led by notable VCs such as Dragonfly Capital and Zhao's DFund, as well as crypto exchange Bitfinex, of which Zhao is a shareholder. He said in RenrenBit's official Telegram channel that the round valued the firm at $16 million.

Some users questioned the legality of RenrenBit's token sale in China, as the country's central bank notably banned initial coin offerings (ICOs) and token fundraising in 2017.

Zhao responded in the Telegram channel:

However, he declined to further clarify what these boundaries are when contacted by CoinDesk.

Founded in late 2018, RenrenBit operates like a broker for lenders and borrowers who need to borrow Chinese yuan or crypto assets with other crypto assets pledged as collateral. It emerged as part of the growing landscape of crypto lending businesses in China and worldwide.

One of the earliest bitcoin investors in China, Zhao entered the crypto industry around 2012 with about $1.5 million after selling his earlier startup Moji, a mobile weather forecast app.

He rode the bull run in 2013 but fell into debt of over $10 million after his bitcoin futures position got forcibly liquidated when the price tanked in early 2014 following the Mt.Gox hack.

Zhao shifted to OTC trading over the past few years, the profits of which helped him accumulate capital to repay the debt.

He then founded DGroup, which runs an OTC trading desk and the cryptocurrency fund DFund.

Dong Zhao image courtesy of Mars Finance