A single whale on Bitfinex likely manipulated bitcoin’s historic surge in 2017, academics say

A single market whale on cryptocurrency exchange Bitfinex likely manipulated bitcoin’s historic surge of over 2,000% in 2017, according to two U.S. academics.

John Griffin, a professor at the University of Texas and Amin Shams, an assistant professor at Ohio State University, have jointly updated a paper they first published in 2018, saying that one entity on Bitfinex moved bitcoin's prices in 2017. Griffin and Shams did not name the entity.

The updated, peer-reviewed paper, shared with Bloomberg and set to be published in a forthcoming Journal of Finance, examined stablecoin tether (USDT) and bitcoin (BTC) transactions from March 1, 2017 to March 31, 2018, concluding that BTC purchases on Bitfinex increased whenever bitcoin’s value fell by certain increments.


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

Bitfinex general counsel Stuart Hoegner rejected the claims, saying that the paper is “foundationally flawed” because it is based on an insufficient data set. “This is a transparent attempt to use the semblance of academia for a mercenary money grab. Updates or not, the paper lacks academic rigor,” Hoegner said.

Last month, Bitfinex and Tether both issued separate statements, saying that they are aware of “an unpublished and non-peer reviewed paper falsely positing that Tether issuances are responsible for manipulating the cryptocurrency market.” However, the updated paper is notably peer-reviewed.

In their first paper, Griffin and Shams said that tether was “used both to stabilize and manipulate” bitcoin prices in 2017. At the time also, Bitfinex rejected the claims, with its CEO JL van der Velde saying: “Bitfinex nor Tether is, or has ever, engaged in any sort of market or price manipulation.”