Bitcoin's price volatility has been in the spotlight. Not only the cryptocurrency market, but also relevant departments in the United States are closely watching the price changes of Bitcoin.
to reportto report, the U.S. Department of Justice is currently investigating whether last year's large fluctuations in bitcoin prices were manipulated by traders buying and selling USDT.
It is reported that U.S. federal prosecutors began investigating cryptocurrencies a few months ago. They suspected that the sharp price fluctuations involved Tether and the cryptocurrency exchange Bitfinex using illegal means to intervene in price changes.
Tether is a subsidiary of Bitfinex, both headquartered in Hong Kong, and the management of the two companies is the same. The predecessor of Bitfinex was Renrenbee Limited, a B2B payment service provider, later named iFinex, and then started to be an exchange. The current boss is Jan Ludovicus van der Velde, the CEO of Bitfinex and Tether. In February 2015, Tether released USDT to the public and listed on the Bitfinex exchange.
For this large price fluctuation, some economists believe that some traders use USDT to maliciously buy Bitcoin. University of Texas professor John Griffin and co-author Amin Shams questioned price volatility in a June paper. Tether transactions show patterns of propping up and manipulating Bitcoin, the paper writes. The paper’s argument is that Tether was used to buy Bitcoin, and that half of Bitcoin’s 1,400% rally last year was manipulated. John Griffin reportedly briefed the Commodity Futures Commission on their findings earlier this year.
Tether and Bitfinex CEO JL van der Velde declined to comment. None of Tether’s outside counsel, Bitfinex’s general counsel, responded to the inquiry.
As of now, there is no investigation result that the company's executives are suspected of illegal activities. Neither the DOJ nor the Commodity Futures Commission is currently accusing anyone of any wrongdoing, so Tether and Bitfinex may ultimately conclude that nothing illegal happened.
