Tether accused of minting almost $400 million in uncollateralized UDST to prop up bitcoin

Tether, the largest stablecoin by market capitalization, has issued over $300 million in USDT during the last week.

The sudden increase in supply has resulted in accusations that Tether is, once again, engaging in market manipulation and that its stablecoin is still unbacked by dollar reserves.

Tether and closely-connected exchange Bitfinex have been involved in a large amount of controversy.

Tether's USDT underpins billions of dollars of value in the cryptocurrency markets.

To further exacerbate issues, Tether has refused to undergo audits or clearly disclose its banking relationships.

8th, Tether began increasing the circulating supply of USDT. Over the last month, the supply of USDT increased by $417 million.

The move drew criticism from Tether and Bitfinex watchdog Bitfinexed, who claims to have exposed the "Bitfinex/Tether scam" which was later covered by Bloomberg, the New York Times, and the Wall Street Journal.

Tether is once again injecting the cryptocurrency markets with nearly $400M of fake money.

According to research conducted by a University of Texas professor John Griffin and co-author Amin Shams, there is evidence that Tether is engaging in Bitcoin price manipulation.

"First, Tethers are created by the parent company Tether Ltd., often in large chunks such as 200 million. Almost all new coins then move to Bitfinex, he said. When Bitcoin prices drop soon after the issuance, Tethers at Bitfinex and other exchanges are used to buy Bitcoin 'in a coordinated way that drives the price.'".