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Bitcoin [BTC] rigging: Department of Justice initiates probe into alleged price manipulation by Bitfinex and Tether during 2017 rally

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Bitcoin [BTC] rigging: Department of Justice initiates probe into alleged price manipulation by Bitfinex and Tether during 2017 rally

Tether and Bitfinex have been under US Securities and Exchange Commission [SEC] and Commodity Futures Trading Commission [CFTC]’s radar for a very long time in relation to Initial Coin Offering [ICO] scams and market manipulation, but nothing concrete was ever established against them. As new findings come to light, according to a report by Bloomberg News, three people familiar with the source claim that CFTC and federal prosecutors are looking into price manipulation of Bitcoin, which is interconnected with Bitfinex and Tether – a popular stablecoin.

It is well-known that Bitfinex and Tether work together as they share the same management team and they have been steeped in rumors surrounding Tether and whether it is actually pegged by the USD in a 1:1 ratio.

The Justice Department’s probe is focused on the exponential rise of Bitcoin’s price last year and if it was purely based on public and investor demands. The sources close to the matter also said that the Justice Department was looking into how Tether creates new coins which enter into the cryptocurrency market and mostly through Bitfinex.

According to Bloomberg, the probe by the Justice Department takes a closer look into the allegations made in a paper authored by John Griffin and Amin Shams.

The paper, ‘Is Bitcoin Really Un-Tethered?’, claims:

“Purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices. Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies.”

The research, a 66-page long analysis, further added that USDT was used buy BTC at important market positions [when it nosedived], helping it “stabilize and manipulate” the token’s price.



John Griffin, a finance professor from the University of Texas, who has a 10-year track record of spotting financial fraud, declined to comment on the matter when asked whether he was questioned by the government officials, Bitfinex’s CEO J L van der Velde disregarded the findings of the paper.

Tether has tried several times in the past year to clear the air regarding its peg to the USD. Tether recently confirmed that it had established a banking relationship with a bank based in the Bahamas and the latter issued a letter confirming the portfolio value of Tether at $1.8 billion.





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Akash is your usual Mechie with an unusual interest in cryptos and day trading, ergo, a full-time journalist at AMBCrypto. Holds XRP due to peer pressure but otherwise found day trading with what little capital that he owns.

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HitBTC responds to allegations of insolvency, refutes claims made by Redditors

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HitBTC responds to allegations of insolvency
Source: Unsplash

HitBTC, a Hong Kong-based exchange has been the center of accusations among users on Reddit, Twitter, and other forums. HitBTC users started complaining about issues regarding withdrawal and extensive procedures after one particular user @ProofofReserach put out a thread alleging insolvency of HitBTC.

To put an end to all the accusations, HitBTC has broken its silence with a blog post explaining their side of the story. According to HitBTC, their systems performed well during the winter of 2017-18, however, HitBTC mentioned that due to overwhelming demand for the services, they experienced bottlenecks at an operational level.

Referring to the BitcoinExchangeGuide article, HitBTC responded:



“A widely quoted article, in its entirety, is based on only 2 AML cases. One of them was initiated as part of the investigation into the December, 2018 BTCP security breach, at the request of the coin’s core team. Unfortunately, there is no clear indication of the nature of the second case that can be discerned from the article. The author of the article failed to track the deposit/withdrawal dynamics that did not uncover any irregularities. A simple block explorer or our public System Monitor would suffice for these purposes”

Additionally, referring to the altcoins being added and removed from the platform, the exchange said that they were honored to work with a diverse range of projects, however, since the crypto sphere was still nascent, there were lapses in their judgment in assessing the integration partners. With the above-mentioned prominent cases, HitBTC also addressed other topics.

@ProofofResearch replied to HitBTC’s blog:

“Is there a reason why you’re unable to tell people us where your Bitcoin storage is at? If what I published is as untrue as you claim it is, then providing a wallet address where your Bitcoin funds are stored will go a long way in *proving that*.”





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