Forensic Study Claims Bitcoin’s 2017 Rise was Manipulated by a Single Large Player

 

 

 

 

 

 

In June 2018, researchers John Griffin and Amin Shams published a paper arguing that trading patterns on the blockchain suggested that the Tether stablecoin had been utilized to manipulate the price of Bitcoin during 2017’s historic cryptocurrency bull run. A new forensic study from the duo has reportedly found that the manipulation was caused by “one large player.”

The researchers examined more than 200 gigabytes of bitcoin and tether transaction data, CNBC reports. According to the study report, they identified a pattern involving tethers traded for bitcoins:

“We find that the identified patterns are not present on other flows, and almost the entire price impact can be attributed to this one large player. We map this data across both blockchains and find that the one player or entity (labeled as 1LSg throughout the paper) is behind the majority of the patterns we document.”

Though the identity of the alleged “large player” remains unknown, the researchers said that they tracked the data clusters to a single large account at the Bitfinex exchange. Their examination of the data suggests that the single large player used that account to manipulate bitcoin demand with “extreme flows of tethers.”

The two researchers also suggested that Bitfinex’s operators were either part of the scheme or knew about it – an accusation that the company has denied. The exchange’s general counsel, Stuart Hoegner reportedly told the Wall Street Journal that the research is flawed. According to Hoegner, market demand for tether was driven by “the global rise of digital currency.”

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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