University of Texas Professor John Griffin and Ohio State University’s Amin Shams have claimed that a single entity was behind bitcoin’s historic 2017 bull run to a near $20,000 all-time high.

According to Bloomberg, the cryptocurrency whale used popular cryptocurrency exchange Bitfinex to send BTC’s price higher when it fell below certain thresholds, via transaction that relied on Tether’s USDT stablecoin.

In an interview, Griffin stated:

Our results suggest instead of thousands of investors moving the price of Bitcoin, it’s just one large one. Years from now, people will be surprised to learn investors handed over billions to people they didn’t know and who faced little oversight.

The researchers’ theory is partly based on Tether’s stablecoin to actually being backed by U.S. dollars, which would mean the firm created USDT out of thin air to then buy Bitcoin, which would help the cryptocurrency’s price rise.

The authors of the paper reportedly examined Tether and BTC transaction from March 1 of 2017 to March 31 of last year, and concluded bitcoin purchases on Bitfinex increased when BTC’s price fell by certain increments. They claim to have found a pattern “only present in periods following large printing of Tether, driven by a single large account holder.”

Griffin and Shams’ paper was initially published last year and claimed USDT was used to “stabilize and manipulate” BTC prices back in 2017. Both Bitfinex and Tether have rejected these claims, and have even issued separate statements saying they’re aware of “unpublished and non-peer reviewed paper falsely positing that Tether issuances are responsible for manipulating the cryptocurrency market.”

Tether’s Response

The updated paper is now reportedly peer-review and is set to be published in the Journal of Finance. Speaking to Bloomberg Tether’s General Counsel Stuart Hoegner argued the paper is “foundationally flawed” as it’s based on an insufficient data set.

The document, he added, was likely published to back a “parasitic lawsuit.” The lawsuit he was referring to was filed by the New York Attorney General over an alleged $850 million “cover-up.”

Hoegner reportedly added:

This is a transparent attempt to use the semblance of academia for a mercenary money grab. Updates or not, the paper lacks academic rigor.

The general counsel further noted that “macroeconomic experts and stakeholders” in the cryptocurrency space understand that “the global rise of digital currency that has driven the markets and demand for Tether.”

While Tether is dealing with the NYAG’s lawsuit, the Justice Department and the CFTC has also opened a criminal investigation into it. Neither the CFTC or federal prosecutors in the US accused Bitfinex or Tether of wrongdoing.

Featured image via Georg Wolf on Unsplash.