Tether movements on Kraken prompt ‘red flag’ claims

July 10, 2018
Richard Reed

Unusual trading patterns affecting the ‘stablecoin’ Tether on popular crypto exchange Kraken could be signs of market manipulation, it is claimed.

Tether cryptocurrency

Small trades in Tether, which is tied to the dollar, seem to be moving prices as much as big trades on the exchange – something that should defy the laws of economics.

Professional poker player Andrew Rennhack noticed the anomalies – known as ‘red flags’ – after downloading data from the exchange, according to Bloomberg News.

The news site decided to carry out its own analysis and checked more than 56,000 trades placed on Kraken between 1 May and 22 June.

It ran them past New York University Professor Rosa Abrantes-Metz and former Federal Reserve bank examiner Mark Williams, both of whom said they had never seen a market behave that way before.

The two experts found that many orders went to five decimal places, and hypothesised that this could be a signal to trigger automated trading programs – perhaps taking both sides of a transaction, something known as ‘wash trading’. This is illegal on stockmarkets but not in cryptocurrencies.

Kraken CEO Jesse Powell told Bloomberg it had not verified the legitimacy of the data supplied.

“Nothing looks out of place to us in our publicly available data feed,” he said.

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