Kraken Retailiates Following Unfavorable Judgement By Bloomberg Concerning Tether
The Kraken cryptocurrency exchange platform has rebuked Bloomberg for accusing it of market manipulation using the Tether (USDT) stable in a post published a few days ago.
The post revealed that Bloomberg carried out a thorough review of Kraken’s public ledger in which the media house claims to have evaluated 56,000 trades from May 1 to June 22. The research was done with the help of Mark Williams, a former Federal Reserve bank examiner and Rosa Abrantes-Metz, an NYU professor. They claim to have observed a patter initially discovered by Andrew Rennhack, a professional poker player, where there was lack of significant price movements between large and small USDT orders.
According to the publication, large orders involving Tether did not have much of an impact on market prices and the same case was observed with small orders. Specific order prices have previously been thought to be price manipulation attempts. The Bloomberg researchers, therefore, concluded that the pattern was a result of price manipulation by Kraken.
Kraken responded to the market manipulation claims through a post published on July 1, through which it lashed out against Bloomberg for the ill-informed post. The post stated that the researchers failed to take into account various factors such as currency pegs, arbitrage trading, and order books.
“Bloomberg News inexplicably fails to comprehend basic market concepts such as arbitrage, order books, and currency pegs,” stated Kraken in its post.
The crypto exchange claims that it found some flaws in the Bloomberg article such as the lack of evidence supporting their claims of market manipulation using USDT. However, one of the biggest arguments presented by Kraken is that Tether is a stable currency that is pegged on the U.S dollar, meaning its price is a rough estimate of the U.S dollar. This means it is not characterized by the high levels of volatility seen in other digital currencies on the cryptocurrency market, such as Bitcoin (BTC).
Based on the above argument, it makes sense that large and small orders do not have much of an influence on the price. The exchange also stated that prices do not change every time order books come into play. Kraken also expressed displeasure in the fact that some journalists and lawmakers were quick to applause Bloomberg for the article despite the misinformed nature of the publication. The exchange also expressed concerns over the integrity of journalists and the legitimacy of their sources.