Former Circle OTC Head Lays Out Real Reason For Bitcoin’s 2017 Pump, And It Wasn’t Tether
- Circle was aware of the increase of Tether at the same time that Bitcoin’s price increased.
- Dan Matuszewski spoke about rumors concerning Circle and Tether during an interview with On the Brink.
There have already been many news media outlets that have voiced their views of the issues concerning Tether, as big names like Bloomberg reported on the possibility that Tether has been used for price manipulation and stabilization of BTC.
Bitfinex has continually denied these accusations, but there are many studies that support the correlation between Tether’s activity and increased Bitcoin value. Dan Matuszewski, the co-founder of CMS Holdings and a former head of OTC trading with Circle, decided to speak up with Nic Carter of On the Brink, as reported by The Block.
During the interview, Matuszewski stated that the correlation between Tether and Bitcoin is “not true whatsoever.” He added,
“I say this as someone who created and redeemed billions of Tether over the course of my life and specifically created it in 2017.”
Instead of boosting up Bitcoin’s price, Matuszewski states that the price of Bitcoin was on the rise already. As the price of Bitcoin seemingly was lower on Bitfinex at the time, rather than Coinbase, a spread emerged, and many traders chose to mint massive Tether volumes to purchase Bitcoin for cheap.
Matuszewski stated that there was incentive to generate more tethers, but Bitfinex didn’t create them from nothing. Matuszewski clarified,
“I can tell you that billions of dollars were sent in to make it like that. I can 100%, without question, verifiably guarantee it happened. I did it, I was there…That money wasn't just being hypothecated. It wasn't just coming out of thin air, that was happening.”
However, this type of transparency wouldn’t have served Circle well at the time, which is why nothing was announced.
Still, Matuszewski felt that the exchange should’ve been open about the stablecoin at the time. He stated:
“Internally, they're like ‘why should we get involved in this? There's a lot of hair on Tether right now. You don't want to be named in all these actions; you don't want the New York AG rolling you into this thing.’”
Essentially, the company found no good outcome that would come from their association, and they opted against dispelling the rumors around Tether. Matuszewski added:
“Here’s the deal, if something goes wrong with USDC there’s no chance that Coinbase and Circle are gonna fight whatever regulatory body comes in. They’re going to 100% give in. […] Tether is going to fight, and they have. So people like that, like maybe they won't just hand over or put KYC restrictions in the chain, or at least they'll try to fight it in court.”