There have been allegations circulating for more than two years that BTC’s price is directly attributable to movements of Tether’s stablecoin, USDT. The belief has been that Tether is manipulating the markets, and the assertion surfaced again this past August and this week. While Tether is usually quiet about what’s going on behind the scenes, it has now issued a response to the latest “flawed” update by John M. Griffin and Amin Shams.
In its response, Tether argues, “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. This critical lack of information means they are unable to establish a valid sequence of events through which the alleged manipulation could have happened. The updated paper is still based on the same incomplete and cherry-picked data that made the original study deficient. Furthermore, the authors now admit that the patterns of trading they observed could be consistent with the market purchase of Tethers, as opposed to the issuance of unbacked Tethers. Importantly, the authors do not possess or reference any data disputing that Tether has sufficient reserves to back up Tether token issuances in circulation.”
However, Griffin and Shams explained how they came up with the timing of the transactions and the flow of capital, using variables that were easy to ascertain. By basing their calculations on traceable flows on the blockchain and other factors, the researchers were able to develop a clear pattern of movement.
Tether also states, “Tether and its affiliates have never used Tether tokens or issuances to manipulate the cryptocurrency market or token pricing.