Kraken Fires Back at “Journalist Lemmings” for Tether Manipulation Accusations 🚨 This article is 6 years old...
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Kraken Fires Back at “Journalist Lemmings” for Tether Manipulation Accusations
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Updated: Mar. 20, 2022 at 4:08 pm UTC
Photo by LinedPhoto on Unsplash
A recent investigation into Tether activity on popular cryptocurrency exchange Kraken triggered scathing responses from the exchange, who fired back at journalists that, according to Kraken, fail to understand market basics.
“On Tether: Journalists Defy Logic, Raising Red Flags,” published July 1, 2018, appears to have been issued as a direct response to a recent Bloomberg investigation claiming several patterns identified by a Bloomberg research team were indicative of wash trading or other less-than-scrupulous exchange practices.
The Kraken team took to the exchange blog to post a damning retort to the research published by the news platform, highlighting the fact that the investigation performed overlooks several key factors:
“ … a recent article in which a reporter covering market structure for Bloomberg News inexplicably fails to comprehend basic market concepts such as arbitrage, order books and currency pegs. More troubling, however, was the applause from other “journalist” lemmings as they followed in walking their reputations off a cliff. It defies logic.”
Bloomberg Doesn’t Appear to Understand Stablecoins
One of the primary points raised within the Bloomberg study — the apparent unnatural stability of USDT — is the focus of a significant portion of Kraken’s response, which takes the time to explain to less technically adept market observers that USDT does not experience the same level of volatility because it is collateralized with $1 US dollar.
“If an order book is too hard a concept to grasp, think about stock at your grocery store. Why doesn’t the price on avocados change every time you put one in your basket?”
Kraken’s response also dismantles accusations of market manipulation, stating that the exchange strives to operate an open and fair platform to all users and would never jeopardize our reputation by engaging in or supporting manipulation:
“After reading the Bloomberg article, we scratched our heads, questioning just what type of manipulation was being claimed. Price manipulation? Is it so hard to believe that an asset-backed stablecoin could trade, well… with so much stability?”
Kraken also notes the recent increase in USDT supply, which “appears reasonable” given fiat currency inflows to the platform between January 2017 and April 2018.
The key driver behind Bloomberg’s accusations of market manipulation is the presence of orders possessing multiple decimal places — a data point that, according to experts consulted by the news platform, is “indicative of wash trading.” Kraken, however, provided succinct insight into the reasoning behind such orders:
“Oh, and we asked the botter responsible for the mysterious 13076.389 orders. The answer: “literally randomly selected”. So, there you have it.”
Kraken CEO Burns Bloomberg Reporter Live on Twitter
Kraken co-founder and CEO Jesse Powell took to Twitter to voice his disappointment with the level of journalistic intelligence present within the crypto news cycle subsequent to the event.
The market for intelligent reporting in crypto hit an all-time low today on @Bloomberg. https://t.co/XDOpzLaoiH. @cryptoscopia slays: https://t.co/Hfy7rM4dVv
— Jesse Powell (@jespow) June 29, 2018
The tweet quickly captured a response from Bloomberg investigation author Matthew Leising, who questioned the Kraken founder on his apparent failure to reply to queries during the composition of the article. Leising, however, remains silent on the matter subsequent to the following response from Powell:
I'm sorry I couldn't save you from embarrassing yourselves sooner.
— Jesse Powell (@jespow) June 29, 2018
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Tether
$1.00109
Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
Kraken
Kraken is a San Francisco-based digital asset exchange in euro volume and liquidity that trades various currencies, including Canadian dollars, US dollars, British pounds, and Japanese yen.