"We find that the identified patterns are not present on other flows, and nearly the entire price impact can be attributed to this one large player", Griffin and Shams wrote. "Years from now, people will be astonished to find out investors handed above billions to men and women they didn't know and who confronted tiny oversight". It is not Bitcoins! The company's General Counsel Stuart Hoegner said that the paper was "foundationally flawed" as it relied on an insufficient data set.
Crypto-controversy: The same executives who own Bitfinex also control Tether, which is no stranger to controversy. The exchange is owned and operated by the same executives who control Tether, and multiple traders have questioned a key assertion about the coins - that each one is backed by one USA dollar. Tether's USDT, the stablecoin supposedly backed by United States dollars with the ratio of 1:1, was used for most of the transactions, Griffin claims. They found that Bitcoin purchases on Bitfinex increased whenever the price dropped by certain increments. They say that one entity on Bitfinex, a popular cryptocurrency headquartered in Hong Kong, appears able to push the price of Bitcoin up when it falls below certain thresholds. They shared their updated research with Bloomberg News.
"This pattern is only present in periods following the printing of Tether, driven by a single large account holder, and not observed by other exchanges "Simulations show that these patterns are highly unlikely to be due to chance".
"This is a transparent attempt to use the semblance of academia for a mercenary money grab", Hoegner told the publication.
In an update to their previous research, the academics are intensifying their argument, which is set to be formally published in a forthcoming peer-reviewed paper for the Journal of Finance.More news: Emma Watson Wants To Be Called ‘Self-Partnered’ Rather Than ‘Single’
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Bitcoin's rise as a form of digital currency was solidified by the cryptocurrency's massive hike in 2017. The development was reported by Bloomberg on November 4.
The theory that Tether is being used to manipulate the value of Bitcoin and other altcoins is not a new revelation.
FYI, Bitfinex and Tether are run by the same people, and both are being investigated for alleged fraud.
Back again in April, the New York Legal professional General's place of work said that Bitfinex lost access to $850 million held by 3rd-bash payment processor Crypto Capital, and covered up the losses by borrowing from Tether's reserves.