Poloniex and Bittrex Accused of Manipulating Bitcoin

Poloniex and Bittrex Accused of Manipulating Bitcoin 1024 500 Crypto Rand Group
Poloniex Bitcoin

Tether and Bitfinex are accused of having manipulated the Bitcoin (BTC) market in late 2017 and this accusation still provokes intense debate. Although there are some recent elements tending to invalidate it, the court case continues to go on. The Poloniex and Bittrex trading platforms are now being swept along in this whirlwind, accused of manipulating bitcoin.

Have Tether’s USDTs inflated the price of Bitcoin?

Tether and Bitfinex are accused of manipulating BTC rates. The creation of USDT is said to have led to the bull run that saw Bitcoin hit $20,000 in late 2017. This class action was originally filed in October 2019.

Poloniex Bitcoin
Evolution of the total amount of USDT in circulation.

Specifically, the lawsuit is brought by investors who feel aggrieved by the two companies. The two companies had bought cryptomoney at the height of the bubble. Tether and Bitfinex are accused of artificially inflating the price of Bitcoin and the crypto market by issuing more stable USDT coins than they had dollars in reserve (USDTs were supposed to be backed 1:1 with US dollars).

“Tether issued billions of USDTs for its own account, without backing them with US dollars – creating USDT from scratch” from the plaintiffs’ indictment.

Yesterday, June 3, a new document was added to this case. It consolidates this class action by adding two new claims, against the trading platforms Poloniex and Bittrex over bitcoin manipulations.

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Poloniex and Bittrex in the dock

Both crypto exchanges had quickly adopted USDT on their respective platforms. This leads the plaintiffs to say that they may have played an important role in the impact of the Tether Stable Corner on prices:

“With the voluntary assistance of Bittrex, Inc. and Poloniex LLC, Bitfinex and Tether used fraudulently issued USDTs to make massive purchases of cryptoactives at strategic times, just as the prices of these assets began to fall. »

For the plaintiffs, there is no doubt that the massive issuance of USDT is the main reason for the exponential rise of the BTC. A rise that reached its peak at the end of 2017:

“Manipulative buying by the defendants (editor’s note: the defendants) drove prices skyrocketing. From December 2016 to December 2017, the price of bitcoin increased twenty-five-fold, from $800 to $20,000, largely due to price manipulation by the defendants. »

At the time of writing, none of the respondent companies has published a response regarding the latest developments in this class action.

The five plaintiffs have made the mistake of buying at the top, in the midst of a buying frenzy (the so-called “FOMO”). The accusations have a basis in truth – we know that Tether sometimes practices fractional reserve for its USDT. But one can also wonder if they are not exaggerated. Maybe these traders are looking for scapegoats for their bad investment timing…

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