Major crypto exchange Kraken[1] has issued a scathing response[2] to a recent Bloomberg article about stable cryptocurrency Tether (USDT[3]) allegedly “defying logic” on Kraken’s platform.
The article in question, titled “Crypto coin Tether defies logic on Kraken’s market, raising red flags,” was published on Bloomberg[4] June 29, with comments and analysis from several academics and Andrew Rennhack, a former professional poker player.
Its authors allege that the price of Tether might be manipulated on Kraken, citing “oddly specific order sizes” and the fact that “huge trades move prices about the same as small ones.”
According to Bloomberg, the trades that are taking place on Kraken on a daily basis should be significantly influencing the price of USDT. Instead, the price of the cryptocurrency remains relatively stable –– something viewed by “experts on market manipulation” as a “red flag.”
In response, Kraken published a post[5] on its official blog July 1 stating that Bloomberg’s writers “fail to comprehend basic market concepts such as arbitrage, order books and currency pegs.”
Explaining their somewhat harsh statement, Kraken points out several factors that have not been taken into account in Bloomberg’s report. According to the exchange, arbitrage trading, the small USDT trade volume on its market, and the fact that Tether is allegedly backed 1:1 by U.S. dollars are the three key reasons that lead to the trades on the platform barely influencing the token’s price.
Bloomberg’s article also pointed out “oddly specific order sizes,” citing 13,076.389 USDT as the third-most-common trade on Kraken during the period of writing. According to the news outlet, these trades “could be signals to cheaters’ automated trading programs.”
In turn, Kraken claims to have spoken to the trader responsible for these specific orders.
