Tether Manipulation Pushed Up Bitcoin's Price, Researchers Find

Cornelia Mascio
Giugno 13, 2018

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"Tether seems to be used both to stabilize and manipulate bitcoin prices", said the paper's co-authors, professor John Griffin and doctoral student Amin Shams.

The record growth in bitcoin past year was actually a coordinated market manipulation, according to recent research by University of Texas Finance Professor John Griffin.

Bitfinex CEO J.L. van der Velde told CNBC that neither the exchange nor tether helped to boost bitcoin prices.

The algorithms the two developed were able to "cluster groups of related bitcoin wallets", according to the study.

Griffin's study didn't have access to email, texts or other communications that would provide evidence that both organizations were involved in price manipulation, but instead analyzed transaction records stored on Bitcoin's public ledger.

"We investigate whether Tether is primarily demand-driven from investors, or supply-driven by Tether issuers pushing the currency on the market".

As CCN reported, Tether has increasingly come under scrutiny as the tether token's market cap has swelled over the past calendar year. "Such price supporting activities are successful, as Bitcoin prices rise following the periods of intervention", they wrote. Since exchanges often face difficulties finding the banking partners and achieving the regulatory compliance necessary to offer fiat-to-crypto trading pairs, many altcoin exchanges use tether as a proxy for physical United States dollars.

Questions about Tether and Bitfinex have dogged the cryptocurrency world since a year ago, when Bitfinex lost banking relationships yet continued to operate, Bloomberg reported.

Around the time of the bitcoin peak, cryptocurrency experts suspected Bitfinex was involved in manipulation, and the US Commodity Futures Trading Commission subpoenaed the exchange after concerns were raised. A follow-up investigation from Bloomberg found that Bitfinex and Tether are likely banking with Noble, but neither company has confirmed it publicly.

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