“These patterns cannot be explained by investor demand proxies but are most consistent with the supply-based hypothesis where Tether is used to provide price support and manipulate cryptocurrency prices,” it further states.

The University of Texas publication follows an earlier report by CoinDesk published last week in which it was claimed that Freedom of Information Requests filed with the CFTC (Commodity Futures Trading Commission) in relation to subpoenas issued to Bitfinex were denied to the individual who made the request.

The Freedom of Information requests appear to have been denied by the CFTC on the grounds that “disclosure of that material could reasonably be expected to interfere with the conduct of the Commission’s law enforcement activities.” It therefore remains unclear at this stage whether the University of Texas’ report overlaps with the CFTC’s own investigations into the Bitfinex platform.

Professor Griffin’s report also states that whilst the promise of cryptocurrencies arising from“a decentralized ledger with independently verifiable transactions has enormous appeal,” the vast majority of crypto-currency trades continue “as transactions [which] occur on centralized exchanges. These exchanges largely operate outside the purview of financial regulators and offer varying levels of limited transparency.”

The price of Bitcoin shot up from around $10,000 on December 1st to just under $20,000 less than three weeks later in a market rally which many analysts identified as unusual bubble behaviour.