A recent study published by two US academics claimed that Tether and Bitfinex manipulated Bitcoin’s parabolic rally in 2017. Days after the publication, Tether has issued an official response denying the merits of the report, saying that the paper lacks credibility.
A few days ago, two university academics updated a paper they have previously published in 2018 regarding a possible price manipulation in the cryptocurrency market. As per their report, the 2017 price surge was severely manipulated by one single whale. They even went further by claiming that Tether (USDT) was used to inflate Bitcoin’s price artificially, and it was carried out on the cryptocurrency exchange – Bitfinex.
It didn’t take long for Tether to publish an official response. The statement completely denies all accusations coming from the report, naming it “a weakened yet equally flawed version of their prior article.” It continues by refusing the remark that only one entity can cause such a price increase and that they have never used Tether tokens for any market manipulations.
“The revised paper is a watered-down and embarrassing walk-back of its predecessor that still suffers from the same methodological defects, coupled with the clumsy assertion that one lone whale may be responsible for the rise of Bitcoin in 2017. […]The purported conclusions reached by the authors are built on a house of cards that suffers from the absence of a complete dataset. […] Tether and its affiliates have never used Tether Tokens or issuances to manipulate the cryptocurrency market or token pricing.”
Tether In Defense Mode
Tether has a history of having to publish official statements in defense, and the same can be said for the cryptocurrency exchange Bitfinex. The two are owned by the same company, called iFinex.
There’s an active ongoing legal case filed from the U.S. Justice Department and New York’s Attorney General, alleging that the company covered up an $850 million loss. Shortly after, BitFinex published a post in response, claiming that the NYAG court filings are “written in bad faith and riddled with false assertions.”
The study from the US academics brought up another important note about Tether’s backing. Tether made a quiet change this year in their terms, adding that “from time to time, [backing] may include other assets […]”. Naturally, the crypto community lashed out, and co-founder William Quigley had to respond by saying that it wouldn’t matter if every Tether is backed by the dollar if everybody agreed to take it and value it at a dollar.