Ethereum co-founder Joseph Lubin has come out guns blazing to defend Tether against price manipulation accusations.
Joseph Lubin doesn’t seem to be convinced about the manipulation narrative against stablecoin Tether (USDT). In an interview with Yahoo Finance on August 28, Lubin said that he has doubts about the entire manipulation saga.
Tether is a revolutionary altcoin that came to being in 2014 to become the first blockchain-powered system that made it possible for tokenization of traditional fiat-backed cryptocurrencies. Earlier in June this year, accusations on manipulation came to being courtesy of a publication of a study done by University of Texas analysts. Tether was suspected to be behind the manipulation of Bitcoin Prices in 2017, which led to BTC hitting an all-time high of $20,000.
According to the paper, purchases made through tether were well timed, leading to a considerable surge in Bitcoin Prices. As much as most crypto enthusiasts are yet to be convinced about Tether’s narrative about its backing assets, Lubin seems to be of the opinion that Tether is indeed not to blame in regards to the manipulation accusations. He claimed:
Based on our analysis, which involves just talking to a bunch of people in the space, we do believe that [USDT] are backed 1:1 by U.S. dollars in bank accounts” although it is “still not 100 percent solid in terms of a story, from my perspective. With respect to market manipulations, I’m not sure that market manipulations are related to Tether directly, if they do exist. It has been an unregulated market set of exchanges that enable big players to do what they want to do. Ideally we’ll get a little better regulation of those centralised exchanges at least.
An unofficial audit
This development comes on the backdrop of an unofficial audit of Tether’s accounts conducted by Freeh Sporkin & Sullivan LLP in June. During the audit, it was revealed that indeed USDT had enough funds that would help back each token 1:1 with U.S. dollars. This notwithstanding, the law firm was quick to note that since it is not a law firm, it did not perform the audits in accordance with the generally accepted principles of accounting.