U.S. DoJ launches probe into alleged Bitcoin manipulation using Tether
Looks like Tether’s and Bitfinex’s truth will be outted soon! The U.S. Justice Department [DoJ] has launched a probe to find the truth of the claims regarding Tether [USDT] being used to drive a bitcoin bull rally last year. According to a Bloomberg report, the DoJ is probing into the suspicions revolving around Tether, the disputed stablecoin and Bitfinex, the controversial crypto exchange, manipulating Bitcoin prices last year.
This is an added worry for both Tether and Bitfinex as they have already received subpoenas from the US Commodities Futures Trading Commission [CFTC] on December 6 last year. The report said that CFTC and DoJ are working together on the investigation.
Tether and Bitfinex which shares the same management and the same CEO, JL van der Velde faced Bitcoin manipulation allegations last year. Though nothing was confirmed, numerous crypto investors claimed that Tether was used to buy Bitcoin when the value of the latter fell in the market. This resulted in a bull rally last year, according to many traders and academics. “We routinely receive legal process from law enforcement agents and regulators conducting investigations. It is our policy not to comment on any such requests,” said the firms at the time.
It is a long due investigation into Tether and Bitfinex as the duo have been involved in other scandals as well. Tether Limited, the company behind most valued stablecoin Tether [USDT], has sidestepped all the queries for an audit proving the dollar backing for the stablecoin. Recently, Tether published a blog confirming that they had enough reserves held but failed to provide any proof for the same. Also, the most valued stablecoin, lost its peg to US dollar which resurfaced the suspicions of the world’s favorite stablecoin having 100% dollar backing.
Tether has also lost multiple banking partners along with Bitfinex. Bitfinex, currently ranked as the third largest exchange, has lost Wells Fargo as its banking partner. It has also lost many Taiwanese banks as partners. Tether and Bitfinex were again embroiled in a scandal which involved their falling out with the Puerto Rican Noble bank.
The participation by both CFTC and DoJ in the probe of Tether-Bitfinex scandal will supposedly bring some clarity to the Tether community. The community can also hope for a full audit from Tether during the period of the probe.
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