The analytical organization LongHash has prepared a report calling into question the evidence of professors Amin Shams and John Griffin that a major investor through the Bitfinex crypto exchange and the tether stablecoin caused a powerful bitcoin rally in 2017.
Arguments for Tether
Representatives of LongHash emphasized, "In our opinion, there are not enough arguments that Tether deliberately artificially influenced the value of Bitcoin." The organization's experts developed the "USDT purchasing power" metric, which represents the ratio of token capitalization to Bitcoin capitalization. It is expected that this indicator will help to assess the possible impact of Tezer on the cryptocurrency market.
LongHash explained, "The metric allows you to determine how much Bitcoin can be purchased for a Tether market offer at the current spot price on the market. As the ratio increases, the possibilities for manipulating stablecoin increase." The highest purchasing power of USDT was observed in the summer of 2017, after which it began to decline. At the same time, the indicator increased sharply during the bear market that was observed in 2018. A year earlier, during the active bullish trend, the purchasing power of stablecoin was in inverse correlation with the value of bitcoin.
The company said, "Calculations indicate that even in the case of tether manipulation, this ability is more effectively observed during the decline in the value of the cryptocurrency. The study showed that the likely impact of stablecoin on the value of Bitcoin reaches the highest value not in a bull market, but in a bear market." In addition, over time, part of the USDT in the market of coins with a stable value is gradually decreasing."
Bitfinex crypto exchange intends to reject a lawsuit for 1.4 trillion dollars
The Bitfinex crypto exchange plans to send a petition to the court of the southern district of New York to reject the "unfounded claim" in the amount of $ 1.4 trillion.
Investors filed a class-action lawsuit against iFinex Inc, its subsidiaries and management. The companies were accused of violating the law on investment of capital received from racketeering, American legislation on commodity exchanges, pump and dump schemes, deliberate deception of investors, money laundering and market manipulation by issuing Tether.
Bitfinex considers the above charges as insufficient and baseless "even at the earliest stage of the trial". The company noted that a significant portion of the plaintiffs ' evidence is based on research by professors Amin Shams and John Griffin. Experts reported on the possibility of managing the value of bitcoin in 2017, and the rapid growth of the price was the result of market manipulation.
Representatives of the crypto exchange are sure that there are "methodological shortcomings" in the study, and the assumption that one major player could cause an active increase in the bitcoin exchange rate is simply "ridiculous".
The crypto exchange blog notes, "The lawsuit does not take into account other factors that influenced the powerful increase in the value of Bitcoin in 2017. It does not provide any evidence of market manipulation by Tether, which during the second to fourth quarter was 700 times larger than the total USDT offer. Thoughtful and professional participants in the crypto asset ecosystem are aware that such accusations are simply groundless and ridiculous."
At the end, Bitfinex emphasized that it plans to zealously protect the interests of the company, coin holders, exchange users, and the entire distributed ledger technology community. The article "Bitfinex Exchange under attack" discusses in detail the lawsuits against the company.
Tether criticized the study of manipulation by a major player, which led to a rapid increase in the price in 2017
Tether published a response to the results of the two professors ' work. The company identified the" key shortcomings " of the study. According to its management, this is only a weakened version of the previous article by researchers. In mid-2017, almost the same report was published. Then the question concerned the activity of small players on the crypto exchange after the release of stablecoin.
The statement noted, "The authors directly say that they do not have accurate information about the critical timing of operations or about the movement of capital on different trading platforms." This indicates that the researchers are not able to determine the sequence of events that led to possible manipulations.
Tether accused the authors of the project that they do not understand the market for digital assets and the demand that stimulates the purchase of USDT tokens. The statement emphasizes, "Their findings offend millions of members of our community who trust the sound principles that govern the cryptocurrency ecosystem."
The company stressed that USDT has never been used for the purpose of manipulation in the market of cryptographic currencies, each token has full security, and their release is made in accordance with demand.
Bitfinex crypto exchange considers itself a victim of fraud
The trading platform said that the Panamanian Crypto Capital took fraudulent actions against it. Earlier, the Polish police detained the head of the organization Ivan Molina Li. He is being charged with money laundering through the Bitfinex crypto exchange and participating in a drug cartel. In the end, the platform noted that it will seek to return the money to the stakeholders.
Bitfinex crypto exchange intends to protect its interests in courts of different instances. Its representatives make logical statements in their own defense. There is no doubt that the exchange will continue to operate successfully. Therefore, if you are looking for a reliable platform for trading, we recommend Bitfinex. The crypto exchange is simple, its operation is transparent, and the offered tools are quite comprehensive.
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