According to reports, the U.S. Department of Justice (DOJ) has begun to investigate Tether, namely encryption currency peg to the US dollar currency stability tether (USDT) of the same name, publisher, whether the illegal market manipulation to support bitcoin price.
The Justice Department to investigate the crypto currency price manipulation
Bloomberg citing three people familiar with the matter said in a report, federal prosecutors have conducted extensive investigations of encryption currency market, they have tightened target for Tether and Bitfinex, the latter is shared with the management team of the giant encryption currency exchange.
Tether, the encryption token into circulation of 1 billion 800 million, claiming that each USDT unit has a $1 store in the company owned bank account. The company’s current banking partner Deltec Bank recently published an open letter that tether holds enough dollars to pay the outstanding USDT, but some lawyers said that the letter writing is to exempt the bank should bear any responsibility for the authenticity of the.
Most of the Tether through the Bitfinex entry and exit circulation, Bitfinex USDT will always be $1, regardless of how the global market price. Critics, including researchers from the University of Texas, said Tether at least occasionally by a reserve bank, will support Tether in circulation to stabilize the price of bitcoin, then sell enough BTC to correct its reserves.
The company has denied the allegations, and Mike Novogratz and other industry stakeholders said, when encryption currency in October is lower than the preset 1 dollar price, Tether can redeem more than $1 billion worth of USDT, which strongly indicates that the token has the full support of the dollar. A follow-up study of University of Queensland business school think further, without affecting the tether bitcoin price margin.
The Ministry of justice, CFTC will cooperate in the investigation
Bloomberg reported earlier this year, the Commodity Futures Trading Commission (CFTC) in December last year to Tether and Bitfinex to send the summons, today’s report showed that DOJ and CFTC are coordinating their efforts. Professor John Griffin of University of Texas researchers who wrote that tether is used to control the price of bitcoin, said he presented his findings to CFTC.
However, it is crucial that the report pointed out that even if the Bitfinex of illegal activities, exchange operators executives may not be affected.
“Unable to determine whether government officials only occurred in the investigation on the Bitfinex activity, or whether the exchange executives suspected of illegal behavior. Whether the justice department or CFTC has not been accused of any wrongdoing people, it may eventually be identified without any illegal behavior.”
It is unclear the Justice Department investigation of bitcoin price manipulation in the extent to which the market downward pressure on the encryption, encryption market loss in just seven days after a $60 billion, the overall transaction price is less than $150 billion.