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Tether responds to academic paper on bitcoin manipulation; calls it ‘flawed’ and ’embarrassing’

Steven Zheng

Tether has issued an official response to an updated paper republished early this week by two U.S. academics who claimed a single market whale on Bitfinex likely manipulated bitcoin's surge in 2017.

Tether states the authors of the updated paper released a "weakened yet equally flawed version of their prior article," calling the paper "a watered-down and embarrassing walk-back of its predecessor."

"The purported conclusions reached by the authors are built on a house of cards that suffers from the absence of a complete dataset. As an example of one of many deficiencies, the authors openly admit they do not have accurate data on the crucial timing of transactions or the flow of capital across different exchanges," Tether notes, arguing that the lack of information means the academics would not be able to accurately establish the sequence of events that led to the alleged manipulation.

Tether also claims that it and its affiliates "have never used Tether tokens or issuances to manipulate the cryptocurrency market or token pricing" and that "all Tether tokens are fully backed by reserves and are issued pursuant to market demand, and not for the purpose of controlling the pricing of crypto assets."

Tether concludes its response by stating that the growth of USDT token issuance is "not a product of manipulation; it is a result of Tether’s efficiency, acceptance and widescale utility within the cryptocurrency ecosystem."