Crypto Firm Rejects Paper Claiming It Was Used to Manipulate Bitcoin Price, Says Study ‘Built on a House of Cards’


A visual representation of the digital cryptocurrency, Bitcoin is displayed on June 25, 2019 in Paris, France.

© Chesnot/Getty
A visible illustration of the digital cryptocurrency, Bitcoin is displayed on June 25, 2019 in Paris, France.

A cryptocurrency firm has rejected the conclusions of an instructional examine which this week advised it was used to secretly manipulate the worth of Bitcoin.

Buying and selling platform Bitfinex has pushed out a firmly-worded rebuke towards a peer-reviewed paper authored by professors John Griffin and Amin Shams which stated a single entity might have jacked up Bitcoin’s worth in 2017, when the worth of a coin jumped to virtually $20,000.

Their findings, which analyzed a stablecoin known as Tether, constructed on the outcomes of a paper launched final 12 months and comes because the U.S. authorities is more and more probing crypto companies. Bitfinex and Tether are intently linked, every being owned by the identical group of people and headquartered in Hong Kong.

The most recent analysis advised Tether cash have been being created with out satisfactory reserves, no matter demand from buyers. The paper stated “further provide of Tether can create an inflation in worth of Bitcoin that’s not from a real capital circulate.”

In a press release issued yesterday through a PR agency, officers from Tether stated claiming a single entity might be liable for manipulation was a “clumsy assertion.”

It argued: “The purported conclusions reached by the authors are constructed on a home of playing cards that suffers from the absence of an entire dataset.” The analysis checked out transactions of Tether and Bitcoin on their respective blockchains between March 2017 and March 2018.

“The authors don’t possess or reference any information disputing that Tether has ample reserves to again up Tether token issuances in circulation,” officers added in its response, earlier than lashing out at “false bravado” and “aggressive statements to the media” allegedly made by Griffin.

The crypto agency stated: “To scale back the spike within the bitcoin worth in 2017 to such simplistic phrases is facile. It’s also an insult to the thousands and thousands of individuals in our neighborhood that consider within the sound ideas governing the digital forex economic system. Tether and its associates have by no means used Tether tokens or issuances to govern the cryptocurrency market or token pricing.”

It stated claiming Tether was used to allow illicit exercise was “reckless” and “totally false.”

Chatting with Newsweek on Monday, Griffin stood by the staff’s outcomes and spoke out towards an earlier assertion from Bitfinex which criticized the brand new analysis earlier than its launch.

“The unique paper claimed, and this paper exhibits much more proof, that there was at occasions inadequate backing for Tether,” Griffin stated, including: “Their story retains altering. One can learn the detailed proof and see the reality. A typical theme all through historical past of all fraudsters is that they assault their accusers as a substitute of admitting the fraud. I am used to it by now.”

In April this 12 months, New York Lawyer Basic Letitia James introduced that Bitfinex and Tether have been being investigated for fraud. It was alleged that the executives “engaged in a cover-up to cover the obvious lack of $850 million of co-mingled consumer and company funds.”

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