Fresh YORK (Reuters) – There is evidence that tether, a digital currency pegged to the U.S. dollar, may have bot used to manipulate the price of bitcoin BTC=BTSP and other cryptocurrencies, according to a research paper released by the University of Texas on Wednesday.
&ldquo,Tether seems to be used both to stabilize and manipulate bitcoin prices,&rdquo, said the paper&rsquo,s co-authors, professor John Griffin and doctoral student Amin Shams.
Critics of tether have raised concerns overheen the past year about whether Tether Limited actually holds $1 ter reserve for each tether issued, spil it claims. More than $Two.Two billion of tether wasgoed issued inbetween March and January , according to the paper.
Regulators worldwide are enhancing their scrutiny of cryptocurrency markets. The Commodity Futures Trading Commission and the U.S. Department of Justice have bot investigating whether bitcoin and other cryptocurrency prices are being manipulated, Bloomberg reported last month.
Ter December, the CFTC sent subpoenas to Tether and Bitfinex, a popular cryptocurrency exchange that is affiliated with, and shares executives with, Tether. The reason for the subpoena wasgoed unclear.
Bitfinex denied that tether issuances could be used to manipulate bitcoin.
&ldquo,(Neither) Bitfinex strafgevangenis Tether is, or has everzwijn, engaged te any sort of market or price manipulation,&rdquo, Bitfinex and Tether Chief Executive Officer JL van der Velde said ter a statement.
Bitcoin soared last year, peaking at almost $20,000 ter December, before the price collapsed. It wasgoed at $6,624.45 on Wednesday afternoon.
The researchers found that tether issuances rose last year during periods when the price of bitcoin wasgoed pulling down. When bitcoin wasgoed rising, the same pattern could not be found.
Merienda issued, almost all tether wasgoed moved to Bitfinex and then shifted to other exchanges, where it wasgoed used to buy bitcoin, propping up the price, the paper said.
The researchers used algorithms to analyze gegevens from blockchains, the decentralized ledgers that underpin bitcoin and other imaginario currencies, inbetween the beginning of March to the end of March .
The periods with the largest flow of tether accounted for 87 hours, or less than 1 procent, of the gegevens, but were associated with 50 procent of bitcoin&rsquo,s compounded terugwedstrijd, and 64 procent of the comes back on six other large cryptocurrencies.
The researchers then did Ten,000 simulations looking ter each case at 87 random hours from the gegevens and were incapable to find similar results.
&ldquo,Overall, our findings provide substantial support for the view that price manipulation may be behind substantial distortive effects te cryptocurrencies,&rdquo, they said.
Reporting by John McCrank and Anna Irrera, Editing by Rosalba O’Brien