Cryptocurrency exchange Kraken is calling foul on allegations that its tether (USDT) markets are frequently characterized by trading activity commonly associated with wash trading and other forms of market manipulation.
Last week, Bloomberg published an investigative report examining trades involving tether, a “stablecoin” allegedly backed by physical U.S. dollars at a 1:1 ratio. Controversy has long swirled around USDT — as well as its creator, the Caribbean-based Tether — with critics levying accusations that Tether operates a fractional reserve, using un-backed tokens to manipulate the bitcoin price.
Tether’s recently-released “transparency report” has done little to quiet these critics, whose voices have grown louder in the wake of Bloomberg’s explosive report, which suggested that tether maintains it USD peg through suspicious trades rather than organic factors.
Though it stopped short of outright accusing Kraken of directly facilitating market manipulation on its platform, the report said that tether seemed to ignore “the normal rules of economics” and exhibited “a pattern that experts on market manipulation view as a red flag.” The piece also noted that Kraken CEO Jesse Powell is on record downplaying the significance of market manipulation.
True to character, the San Francisco-based Kraken responded to the report with a similarly-explosive blog post. Aided by multiple Ron Burgandy gifs, the cheeky post suggested that it was Bloomberg — not Kraken — who was engaging in market manipulation, as the report was published on June 29, which was also the last day of June trading for CME’s bitcoin futures contracts.
“If we are to take up our pitchforks against market manipulation,