BitMEX Crypto Exchange Tether (USDT) Stablecoin Conspiracy: Here’s What we Know
It seems that there is a very interesting BitMEX-Tether conspiracy. According to some reports, Tether and Bitfinex pumped the price of Bitcoin when BitMEX was performing maintenance operations. This situation has forced BitMEX to liquidate several short positions on the platform.
These reports are very important for the market since the U.S. Securities and Exchange Commission (SEC) has delayed the approval of a Crypto-ETF due to the fact that the market is being manipulated.
One of the most important virtual currency exchanges in the market, BitMEX, started on August 21, scheduled maintenance activities. Just a minute after the exchange decided to start its maintenance activities, Bitcoin price started to grow and be traded close $6800 dollars. That represented an increase of 6% in just a few minutes.
It is important to mention that the exchange was down for a longer period of time than the one originally planned.
At that moment, short positions were in one of the highest levels ever registered in the platform. However, an important and recognized cryptocurrency analyst and trader, @CryptoQF, warned traders about this situation and about the important number of short positions at that time.
I’m not much of a conspiracy guy but it will be epic if bitcoin pumps during the BitMex downtime. If you are shorting there plz make sure you have your stop losses set (may not do a ton of good tho). This can be setting up to be an epic disaster for some. Be safe
— Crypto Quantamental (@CryptoQF) August 22, 2018
Moreover, the famous Omni explorer showed that there was a new issue of Tethers on August 22 around 3 am in the morning. Apparently, the number of Tethers issued was 100 million, a very big amount – but turns out this was just a transfer, not a new USDT generated event.
After it, a transaction has been sent from the Tether Treasury to the Bitfinex exchange. Immediately after, a buy order of 4,000 BTC was placed at the exchange, causing the price to surge in a short period of time.
Because of this situation, traders with short positions opened on BitMEX have seen them liquidated as they were not able to change them when the trading platform was down. Additionally, as BitMEX was closed, there was no selling pressure in the market.
One of the explanations for this situation is that Bitfinex, Tether and BitMEX were conspiring in order to liquidate shorters. In addition to it, they were not able to cancel their positions. However, we should consider that a Bitcoin whale has seen an opportunity to profit when BitMEX was down.
And yes, that could be considered as manipulation. An important whale has decided to trade against traders without experience and with leveraged short positions in an exchange that had a scheduled maintenance.
Clearly, the Tethers printed and sent to Bitfinex do not help Tether solve the issue around its credibility. Tether has been accused in several occasions in the past about manipulating Bitcoin’s price during bear markets.
BitMEX announced in the past that it was going to be carrying out maintenance activities. Traders that left their positions opened should have known the risks associated with it.
As mentioned before, these situations play a very important role in the market. The SEC has been very strict with market manipulation, and all the situation around Tether, Bitfinex and BitMEX is not helping bitcoin and the cryptocurrency ecosystem.