U.S. Justice Department investigates whether Bitcoin’s value was manipulated
The U.S. Justice Department’s recent investigation into crypto manipulation has crypto industry giants, Tether and Bitfinex, denying allegations.
The fierce investigation of the U.S. Justice Department (DOJ) into Tether and Bitfinex has surfaced suspicions of complicity in the manipulation of crypto. Allegations accuse Tether of circulating unpacked tethers in a fractional reserve bank to stabilize the bitcoin price. The company denies this allegation because of their ability to earn $1 billion worth of USDT when the cryptocurrency fell below the value of $1 in October. However, critics still don’t trust this statement under the notion that most tethers circulate through the crypto market by way of Bitfinex.
According to Bloomberg, the Commodity Futures Trading Commission (CFTO) has joined the investigative efforts of the US Justice Department by sending two subpoenas to Tether and Bitfinex last December. Tether critics such as researchers and professors from The University of Texas support the coordinating efforts of CFTC and DOJ. In fact, professor John Griffin not
only authored a paper that alleges tethers are being used to manipulate the price of Bitcoin but briefed the CFTC on his findings.
It’s not clear at this point if the government is solely investigating the illicit behavior of the exchange executives or the activities that occurred on Bitfinex. Although the DOJ’s and CFTC’s have collected supportive finding in the investigation, no one has been accused of illegal activity, which might ultimately conclude that nothing unlawful has actually occurred.