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Hong Kong – Tether is not taking the allegations it had manipulated Bitcoin’s 2017 surge lying down. The company recently issued an official statement claiming Griffin and Sham’s paper was flawed and the authors had no understanding of how the crypto market works.

The problem for Tether, and parent company Bitfinex, started when a University of Texas study alleged that a sole market whale account utilized Tether tokens to manipulate half of the Bitcoin (BTC) price surge in 2017.

The paper has potential far reaching consequences for Bitfinex and Tether since it’s cited as vital evidence in a class action lawsuit filed against the two.

In its official statement, Tether noted that the study’s authors, John M. Griffin and Amin Shams, revised article on Tether was a “watered-down and embarrassing walk-back” of its previous paper. However, it still made the same mistakes in its methodology.

Tether described the authors’ supposed conclusions as being built on a “house of cards,” with a complete dataset notably absent. The company highlighted Griffin and Sham’s open admission that they don’t have exact data on transactions times or how the capital flowed across various exchanges as one example of the numerous mistakes that peppered the study.

The company argued that this dearth of information shows academics can’t accurately establish the timeline of events that resulted in the supposed Bitcoin manipulation. Tether also countered that the insufficient and “cherry-picked” data was why the original paper was weak and lacking, and the re-published paper was suffering from the same defect as well.

Tether also called out the authors in its statement and said they showed a lack of knowledge about the crypto market and what drives token purchases.

Tether said the company and its affiliates never use issuances or Tether tokens to control token pricing or the crypto market. It also claimed that all Tether coins are completely backed by reserves. It noted that the tokens are only issued based on market demand, and not to control the pricing of cryptocurrency assets.

Tether then wrapped up its rebuttal of the study’s claims by stating that the rise of USDT coin issuance wasn’t because the system was rigged. It was caused by Tether’s acceptance, efficiency, and wide scale use within today’s crypto ecosystem.

Insiders have been adding their two cents as well. Circle CEO Jeremy Allaire said the Tether paper erred when it attributed a custodial account address to one trader. He explained that crypto exchanges place all customer funds in a single wallet first before sending transactions to their partner institutions. In short, one Bitfinex wallet could represent the trades of numerous clients.

 

 

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