The Tether report, an anonymous analysis that examines the speculation that price volatility is correlated with USDT issuance, claims that about 48.8% of bull market movements started two hours after the launch of 91 individual tether scholarships.
An anonymous author analyzes the Tether operations
The report is written under a pseudonym consisting of a long string of alphanumeric symbols. The author said he did not want to be identified, in order not to have consequences. Tether is described as "a stable currency," a cryptomon that seeks to "maintain a stable value of one dollar per Tether or USDT".
The report says "Tether as he is today is a rebranding of realcoin that works by taking deposits in dollars from customers and changing them into an equal amount of USDT." The author describes "the ability of digital assets in US dollars without having dollar-denominated bank accounts" as a major trading function to adopt cryptomoneda, saying that this would be "the extreme difficulty many exchanges face when they want to maintain relations with the banks ". For this reason, USDT was "quite attractive".
Tether, charged with suspect activities in 2017
The report says "more alarming events drew attention to Tether in 2017". In April, Tether and Bitfinex revealed that they ended relations with Taiwan, which led to a temporary suspension of customer withdrawals. Then in April, the number of Tether issues had a "massive expansion," despite the fact that the company said it could no longer accept deposits from Taiwan banks.
At the beginning of September 2017, Tether sought to reject the suspicions that the firm would be under-capitalized, promising a historic audit that has not yet been completed. Instead, the company came with an internal document at the end of that month, claiming to show dollar balances of a modest amount of about USD 440 million. The internal memorandum does not disclose "service agreements and institutional names attached to these funds," consisting of a "reduction in transparency from the April report", which even mentions the names of the banking partners.
In November, Tether revealed he had suffered a cyber attack, "mitigated by an amendment to the tether network code." In the following month, they announced that the platform would be stopped and that no more deposits would be made on current wallets.
Despite the hurdles recently faced by Tether, the number of USDTs emitted increased 10 times in just 5 months after the September memo.
The report shows that the issue of USDT and price volatility are related to each other
The dramatic explosion of USDT has led to speculation that Tether was used by Bitfinex to maintain liquidity in exchange after losing bank partners. Some analysts even accuse Tether of generating USDT mass to manipulate the bitcoin price.
The report tests the assumption using empirical data, with an analysis of the relative volatility of the bitcoin price up to and immediately after issuing new tether poles. The article concludes that 48.7% of bitcoin growth during March 29 and April 1 occurred during the two-hour blockade, followed immediately by the issuance of USDT.
The report concludes that "the average price behavior over a two-hour period led to an increase of only 6.5%." Researchers estimate that about 40% of the price increase attributed to USDT is verified.
Incriminating conclusions
The report makes a series of allegations, including that "extremely significant deviations from the form of organic transactions" to large cryptomonas exchanges suggest that "we could have a coordinated manipulation of the markets."
The USDT may have been created when the bitcoin declined, concluding that "Tether is responsible for almost half of the price increase, not even allowing the psychological effects of rallying the market." Research highlights that the statistics presented do not necessarily indicate a bad intention, but merely observe that it is a behavior that must be questioned and further examined.
Finally, the report argues that Tether should perform an audit with a reputable auditor. They added that taking into account the size of the company's operations, a prestigious accounting firm should be employed.
The report suggests that
"The audit should not only include a snapshot of accounts at a given time. I should confirm that each USDT ticket is now supported by the dollar and that it supports all the individual points in the USDT history. More than confirmation that these accounts and correct amounts existed, the nature of these accounts and understandings with banks and Tether should be disclosed to show that these accounts only exist in favor of USDT holders. "