The claims were first made in 2017 in a study by academics John Griffin and Amin Shams following a surge in interest in bitcoin that saw a single unit of the cryptocurrency worth as much as $20,000.
Mr Griffin and Mr Shams are now doubling down on their prior claims, saying that the manipulation was caused by a single actor using the tether “stablecoin” – a cryptocurrency designed to be worth US$1.00 and which is allegedly always backed by equivalent assets – to artificially increase the price of bitcoin.
“By mapping the blockchains of bitcoin and tether, we are able to establish that one large player on Bitfinex uses tether to purchase large amounts of bitcoin when prices are falling and following the printing of tether,” Mr Griffin and Mr Shams wrote in the study.
“Such price-supporting activities are successful, as bitcoin prices rise following the periods of intervention.”
The report alleges that the stablecoins used to buy bitcoin were actually unbacked. This has been a point of contention for tether for some time, with the company repeatedly failing to deliver on promises of an audit of their assets.
However, tether – along with a number of industry figures and experts – has rejected the claims in the report.
“Tether and its affiliates have never used tether tokens or issuances to manipulate the cryptocurrency market or token pricing,” the company wrote in a statement on bitcoin exchange Bitfinex.
“All tether tokens are fully backed by reserves and are issued pursuant to market demand, and not for the purpose of controlling the pricing of crypto assets. It is reckless – and utterly false – to assert that tether tokens are issued in order to enable illicit activity.”
Jeremy Allaire, CEO of Circle, a peer-to-peer crypto payments company, wrote that the study was flawed and refuted the claim that a single entity could be responsible for manipulating the price of bitcoin.
“Exchanges use omnibus wallets that pool all customer balances and transactions on and off the exchange,” Mr Allaire wrote on Twitter.
“So an analysis that shows that ‘a single wallet’ was involved in flows from Bitfinex to other exchanges is meaningless. All it shows is that traders were trading.”
The report also does not take into account a number of other factors involved in the increased cost of bitcoin, including an explosion in public interest that saw large numbers of speculators purchase the cryptocurrency.