They published their paper which alleges that the skyrocketing bitcoin prices in 2017 were a result of artificial inflation.
Their findings are sure to upset hardcore bitcoins supporters who believe that bitcoins massive spike in value during 2017 was a result of legitimate demand from actual investors and not from big players in the market trying to manipulate bitcoin’s value.
There were suspicions in the industry last year when bitcoin started to shoot up in value. Seasoned analysts believed that Bitfinex was contributing to the massive spike in Bitcoin value. Bitfinex is one of the least regulated and biggest cryptocurrency exchanges in the world and has massive influence. The company has a major presence in Asia and offices throughout Asia. Regulators in the United States subpoenaed the company to conduct an enquiry into alleged market manipulation.
Quite a few industry players were already concerned that the bitcoin prices were being pushed up by Bitfinex. As one of the largest exchanges in the crypto industry, it has a lot of influence. The problem is that it is also the least regulated, with offices in Asia and registration in the Caribbean. It was recently subpoenaed by American regulators when concerns about price manipulation started emerging in major publications.
Bitfinex: Might Have Used Shady Practices
The research paper is 66 pages long and takes a look at the digital tokens that were processed by Bitfinex. The researchers looked at the digital tokens going in and out of Bitfinex and found that Bitcoin’s value kept going up at the exchange while it dropped at some of the other exchanges around the world which meant that someone at Bitfinex was trying to boost bitcoin prices. Someone at the exchange also used a cryptocurrency known as Tether to buy some of the other popular cryptocurrencies.
Bitfinex has come out and denied those allegations and refuted the claims made by the paper.
In a statement, Jan Ludovicus van der Velde, CEO of Bitfinex said
Tether issuances cannot be used to prop up the price of Bitcoin or any other coin/token on Bitfinex