Not long ago, it was reported that a user of the cryptocurrency trading platform Bitfinex was responsible for the manipulation that ultimately caused bitcoin to reach the $20,000 mark in December of 2017. However, the company is now rejecting this report, saying that it was built on false evidence and a “house of cards.”
Bitfinex: The Report Is Not True
The report was co-authored by John Griffin, a University of Texas finance professor who issued a separate report last year first making claims of the manipulation. However, while that report simply suggested that manipulation was taking place, this one appears to blame a single entity, though at press time, the person believed to be responsible has not been named.
The data in the report says that this person was likely a whale – a person who held a significant amount of bitcoin in a single wallet on Bitfinex. In addition, the data also alleges that this person likely used Tether, a stable currency, to repeatedly purchase bitcoin whenever its price fell. This inherently caused BTC to garner ties to Tether, which ensured temporary gains for the father of crypto.
The report reads:
Additional supply of Tether can create an inflation in the price of bitcoin that is not from a genuine capital flow.
Bitfinex, however, is scowling at this idea, and calls the statement a “clumsy assertion.” The company states:
The purported conclusions reached by the authors are built on a house of cards that suffers from the absence of a complete dataset… The authors do not possess or reference any data disputing that Tether has sufficient reserves to back up Tether token issuance in circulation.
The report singles out transactions that occurred between March 2017 and March 2018, citing these as the ones primarily responsible for bitcoin’s meteoric rise. Bitfinex representatives also took aim at the dates in question, explaining:
To reduce the spike in the bitcoin price in 2017 to such simplistic terms is facile. It is also an insult to the millions of people in our community that believe in the sound principles governing the digital currency economy. Tether and its affiliates have never used Tether tokens or issuances to manipulate the cryptocurrency market or token pricing.
Griffin: Yes It Is
Griffin, however, stands by the data suggested in the report, saying:
The original paper claimed, and this paper shows even more evidence, that there was at times insufficient backing for Tether. Their story keeps changing. One can read the detailed evidence and see the truth. A common theme throughout history of all fraudsters is that they attack their accusers instead of admitting the fraud. I’m used to it by now.
The fight appears to be having a negative effect on the bitcoin price, which has fallen below the $9,000 mark at press time.