Tether is a cryptocurrency which is backed against the US dollar. Recently, it was found that tether might have been used to manipulate the price of Bitcoin. This research report was released by the University of Texas.
According to professor John Griffin and doctoral student Amin Shams co-authors of the paper, tether was used to stabilize the Bitcoin prices and it was also used to manipulate the Bitcoin prices. This clearly indicates that tether was used to play a role in Bitcoin manipulation.
Past controversy:
Controversies seem to surround tether. Earlier as well, there was a controversy as to whether tether actually has dollars in reserve of each and every cryptocurrency token which they have issued. It is a cryptocurrency which is backed against the US dollar. That is why experts are trying to figure out if they have US dollars in reserve or not. Between March 2017 and January 2018, the total number of tether tokens which were issued was around $ 2.2 billion. This clearly indicates that the owners of tether should have a reserve of $ 1 billion.
All over the world, regulators are getting more and stricter on cryptocurrencies. Also, the rules and regulations pertaining to cryptocurrencies are increasing at a rapid pace. This is one of the main reasons why any kind of manipulation of the Bitcoin prices will surely gain the attention of the authorities.
Bitfinex has some executives which are common with tether. As a result, CFTC had sent to subpoena to the cryptocurrency exchanges well. The purpose of this subpoena, however, is not clear yet.
Bitcoin had increased as high as $ 20,000 in December of last year. Currently, it is trading around $ 6500. That is why the volatility in Bitcoin has been immense. Experts, as well as authorities alike, are trying to figure out the cause for this enormous loss and huge volatility. This is one of the main reasons why they are trying to figure out whether tether was used in order to manipulate the Bitcoin prices.
It remains to be seen whether the authorities are able to catch the culprits. Even if tether was used, at least some individuals will be behind the manipulation. It remains to be seen whether authorities are able to catch those manipulators or whether they go scot-free without any issues at all. It seems like authorities might have finally detected the culprits behind the manipulation of Bitcoin.
