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Tether might have been used to manipulate Bitcoin price in late 2017

Tether, a cryptocurrency token that is supposedly backed by the US dollar, has been spent on Bitcoins at key instances to support its price, reveals a paper published by a University of Texas professor, cited by Bloomberg.
 
The pattern has helped drive Bitcoin prices to a record high in December, says  John Griffin, professor in finance, who in 2017 has also shed light on a potential  manipulation of the VIX  benchmark index.
 
Each of the 2.5 billion Tethers in existence is supposedly backed by a real US dollar in a bank account owned by Bitfinex, a crypto currency exchange registered in the British Virgin Islands. Because of the  volatility of the Bitcoin, since its creation in 2015, Tether has widely been used as a safe haven by many crypto investors. 
 
Meanwhile the U.S. Commodity Futures Trading Commission subpoenaed both Tether LTD and Bitfinex, in December, seeking evidence that Tether is backed by a reserve of U.S. dollars, as claimed. Tether and Bitfinex haven’t been officially accused of wrongdoing yet. 
 
“It is the mother of all crypto criminal scams. Clear evidence and proof of massive criminal price manipulation. When will the SEC and CFTC indict and put these criminals in jail?” wrote on Twitter Nouriel Roubini, economist and chairman of Roubini Macro Associates LLC after the publication of the paper.
 
In his analysis “Is Bitcoin Really Un-Tethered?” Griffin examines how the 2.5 billion Tether coins in existence have circulated the markets and the effect they had on the Bitcoin prices. The research showed a pattern of Bitcoin price support, Griffin said, cited by Bloomberg.
 
Bitcoin raised to nearly 20,000 USD in December before crashing below 6500 USD this spring.
TAGS: Bitcoin  Tether  USD Tether  USDT 
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