As bitcoin continued its downward slide Tuesday, U.S. regulators are reportedly looking into whether its record-breaking rally last year was the result of market manipulation.
The U.S. Justice Department is investigating whether traders used tether, a controversial cryptocurrency that founders say is backed 1:1 by a U.S. dollar, to prop up bitcoin, according to a report from Bloomberg News, which cited three people familiar with the matter.
Tether and Bitfinex did not immediately respond to CNBC's request for comment.
Federal prosecutors launched a criminal probe into the cryptocurrencies earlier this year, Bloomberg reported. But they now suspect that traders on crypto exchange Bitfinex might have been using tether to coordinate bitcoin's price moves illegally, Bloomberg reported.