San Francisco-based cryptocurrency exchange Kraken has hit back at Bloomberg in response to an article about controversial stablecoin cryptocurrency Tether, and how it defies “logic” on Kraken’s trading platform.
Earlier this week, Bloomberg published an article entitled “Crypto Coin Tether Defies Logic on Kraken’s Market, Raising Red Flags” comparing what happens on Kraken’s platform to be similar to “defying gravity.” Specifically, the article calls into question “huge trades move prices about the same as small ones,” as well as “oddly specific order sizes—many going out to five decimal points, with some repeating frequently.” The article concludes these issues to be “red flags” that signify “market manipulation.”
Kraken struck back against Bloomberg’s claims, calling their journalism into question, citing a lack of understanding of “basic market concepts such as arbitrage, order books and currency pegs. “Kraken instead says that it is Bloomberg that “defies logic.”
Kraken then took users through a walkthrough explanation about Tether to "address the Tether FUD here once and for all.” Kraken calls out things like USDT’s price stability, it doesn’t pose a solvency risk to exchanges, and that supply of USDT only increases with their own fiat deposits. The exchange also cleared the air over price and volume manipulation. Lastly, Kraken pointed out that it only represents 0.1% of daily USDT volume - a flash in the pan that is surely impossible to have significant effect across the overall market.
While Kraken has done a great job directing negative attention away from itself, even turning it back on Bloomberg for its seemingly false claims, Tether on the other hand simply cannot clear its name. The firm even released a report from a third-party firm that backs up its claims that it is 1:1 backed by USD fiat currency for every Tether in the market. However, controversy continues to surround the suspicious stablecoin.