New research suggests that a price manipulation scheme may have been behind the cryptocurrency’s extraordinary rally in 2017.
The study: Researchers found that large purchases of cryptocurrencies from multiple platforms in exchange for Tether, a crypto-token that’s supposedly pegged to the US dollar, were “timed following market downturns.” Since cryptocurrency prices tend to move as one, this resulted in “sizable increases in Bitcoin prices.” This suggests that a few players may have been propping up the price of Bitcoin and other large cryptocurrencies.
The shady backstory: As the price of Bitcoin was soaring last fall, suspicions began to emerge that Tether was being used to boost the price. Leaked documents revealed that the operators of Bitfinex, one of the world’s most popular cryptocurrency exchanges, were also behind Tether.
Peeling back the curtain: The findings come as the US Department of Justice is in the midst of a criminal investigation, which it launched last month, into cryptocurrency price manipulation.
The study: Researchers found that large purchases of cryptocurrencies from multiple platforms in exchange for Tether, a crypto-token that’s supposedly pegged to the US dollar, were “timed following market downturns.” Since cryptocurrency prices tend to move as one, this resulted in “sizable increases in Bitcoin prices.” This suggests that a few players may have been propping up the price of Bitcoin and other large cryptocurrencies.
The shady backstory: As the price of Bitcoin was soaring last fall, suspicions began to emerge that Tether was being used to boost the price. Leaked documents revealed that the operators of Bitfinex, one of the world’s most popular cryptocurrency exchanges, were also behind Tether.
Peeling back the curtain: The findings come as the US Department of Justice is in the midst of a criminal investigation, which it launched last month, into cryptocurrency price manipulation.
—Mike Orcutt
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