More than $84 million worth of the controversial stablecoin Tether (USDT) has just been transferred to the Malta-based cryptocurrency exchange OKEx. With some commentators alleging that USDT is being used to artificially prop up the price of Bitcoin, the funds arriving at the trading venue today may have been partly responsible for the latest price increase.
As reported earlier today by Twitter blockchain analysis account Whale Alert (@whale_alert), two large transactions of Tether (USDT) have just arrived at the major digital asset exchange OKEx. The transactions, of more than $14 million and $70 million each, were transferred from two different unknown TRON wallets to the trading venue.
— Whale Alert (@whale_alert) December 4, 2019
Previously, BeInCrypto has reported on major price pumps following similar transactions to exchanges. At the end of October, millions of dollars worth of new USDT were minted at the so-called Tether Treasury. This followed a dramatic sell-off that took the price down to $7,400, lending support to the arguments of those concerned that USDT is being used to artificially prop the price of Bitcoin up.
Tether and its affiliated exchange Bitfinex have been the subject of much controversy in the cryptocurrency industry. The companies have faced lawsuits and critiques from researchers over their claims that each USDT is backed by a real US dollar in a bank account. Questionable banking arrangements and the reluctance of either firm to undergo a proper audit have invited a lot of skepticism.
A recent study, reported by BeInCrypto, alleged that new USDT issuance was responsible for price rallies in the Bitcoin market. The researchers behind the TokenAnalyst report identified that more than two-thirds of Bitcoin price pumps coincided with the new issuance of USDT.
Tether and Bitfinex have both dismissed the research as no more than an effort to add fuel to the New York Attorney General’s ongoing case against the companies. Bitfinex and Tether have pointed to their efforts at providing transparency to Tether issuance and stated that the report is both “an unpublished and non-peer reviewed paper” and, therefore, cannot prove the allegations of market manipulation against the companies.
Bitcoin Manipulation ‘Witch Hunt’
Although such claims of USDT being used to pump up the price of Bitcoin are common in the cryptocurrency industry, not all commentators are convinced. Gabor Gurbacs, a director at VanEck (a firm pushing hard for a Bitcoin ETF), claims that Tether has done no wrong with its stablecoin offering and the allegations against the firm are part of an ongoing “witch-hunt.”
I am tired of hoodwink academics, hype-media and uninformed lawyers discrediting the hard work & structural innovation that @Tether_to and @bitfinex built. They built services for #bitcoin & #crypto companies that others failed to provide. Stop the witch-hunt; protect innovation!
— Gabor Gurbacs (@gaborgurbacs) October 7, 2019
While the jury is still out about whether Tether and Bitfinex are involved in market manipulation, it’s clear that new USDT tokens hitting exchanges do often coincide with Bitcoin price increases in the Bitcoin market. With a total of more than $84 million hitting OKEx alone today, it is not surprising to see Bitcoin pump so rapidly.