Bitcoin's price manipulated?

While Bitcoin's prices are falling sharply, the US Department of Justice is starting a new phase in its investigation into whether last year's crypto rally has been manipulated with the use of the alternative digital token, Tether.

With the start of the initial investigation a few months ago, the federalists are deepening in an attempt to see if there really was manipulation after they encounter a new trail linking Bitcoin and Tether. It seems that Tether and the Crypto trading site Bitfinex  have been used illegally to drive Bitcoin prices upwards. The Federals have questioned three people who are familiar with the case.

Bitfinex is headed by the same people who run Tether Ltd., a Hong Kong-based maker of the digital tower Tether. When new crypto coins or tokens are created, they are usually placed on Bitfinex. According to some traders and people close to the management of both companies, Tether has been used to buy Bitcoin at important moments, especially when the digital token loses its worth. JL van der Velde, the executive director of Tether Ltd and Bitfinex, has denied these claims.

The Justice Department's actions are in addition to the US Financial Supervision Commission's move, which sent court summons last year to the representatives of the two companies. The two investigating authorities are starting to coordinate their actions together, but no directly accused persons are currently identified in deliberate actions, so it is most likely that the investigation will not reveal anything proving real manipulation of Bitcoin's cost.

Source: Bloomberg Finance L.P.

Graphs: Used with permission of Bloomberg Finance L.P.

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