Kraken, US-based cryptocurrency exchange founded in 2011, has responded to a recent article written by Bloomberg that claims Tether (USDT) is being manipulated on their exchange platform. The exchange took a dig at the article’s intricate headline and alluded that the editorial was penned to affect the price of futures trading
Bloomberg alleges that while the prices of other cryptocurrencies at the exchange fluctuated following the rule of demand and supply, the rate of Tether remains suspiciously constant. Bloomberg raised the red flag after checking 56,000 trades that were processed at the exchange platform between 1st May and 22nd June and consulted other two people; Mark Williams, former Federal Reserve banker and Rosa Abrantes-Metz, a New York University professor. They all made conclusions that the lack of movement was not natural.
The article pointed out that both small and large trades are causing an irregular impact on the price. Besides, big trades have specific amounts that are unlikely to be made by humans. Unlike the price of Bitcoin that fluctuates with changes in trading volume, the cost of Tether is incompatibly changing by large and small orders to either buy or sell the coin.
While responding to the allegations, the crypto exchange wrote that; Unlike other cryptocurrencies, Tether does not fluctuate since it is asset-backed. Secondly, those orders that are awaiting t be filled approximately $1 million and this is the main reason why the price does not fluctuate when a request is executed. Thirdly, Coinmarketcap.com indicates that Tether’s daily trading volume is at $3.6 billion and approximately $285,000 is traded on the crypto exchange. Lastly, the tactic of wash trading is not possible, because the volume is small and could not create any major effect.
In future, Bloomberg journalists will have to do extensive research on crypto exchanges, because the allegation made them look more unprofessional in their field. Kraken suspect foul play, finding it hard to believe that a renowned outlet like Bloomberg could lack a basic understanding of the crypto market. Mark Williams, former Federal Reserve Bank examiner was one of the experts who predicted that the price of Bitcoin would be valued at less than $10 by mid-2014.