Kraken reportedly had a pretty severe bug in its trading software recently which allowed some users, who were testing a new feature, to buy BTC for $8,000 and sell it for over $12,000 – neither of which price meshes with recent realities.
According to Kraken, no one was able to settle any trades at the ridiculous arbitrage. Safeguards in place settled trades at the appropriate prices.
Unleash The Mistakes
The exchange confessed the errors on Twitter.
All things being equal, some still took issue with the exchange’s tactics, believing that the trades should have been settled at their stated prices.
'Correctly' triggered orders causing losses for your customers because of your order malfunction?
— Panther ? (@panther_crypto) September 14, 2019
Many users were heated, and responded with anger on Twitter.
Several people claimed to have lost money due to Kraken’s behavior.
Jesse Powell felt compelled to defend his exchange’s behavior.
So, because a bug is discovered in a limited production beta once every few years it means there’s no testing? Our new order types undergo thousands of automated and human tests for months before they make it to prod. You can’t find all the bugs all the time.
— Jesse Powell (@jespow) September 14, 2019
If the bug had been allowed to work itself through, some users would have instantly found liquidity for sells up to 50% higher than what they had just purchased BTC for.
The BTC sales would have been absurd as well, clocking in at well under $9000.
As usual, the cryptoverse has speculated foul play, believing that some portion of Kraken’s users may actually have executed ridiculous, false orders.
Traders Furious – As Usual
But the majority of the upset surrounding the incident – which, again, is related to new software being tested – relates to people’s orders being canceled as a result of the exchange’s mistakes. Traders don’t appreciate “losing money” – or being forced to sell before they were ready – especially if it seems that others were enabled to make absurd profits.
There’s no data to suggest that Kraken has, at any point, fibbed about whether or not people were able to execute the orders.
The behavior of crypto exchanges is a critical matter for the industry at large, as it seeks to be accepted by the traditional financial regulatory bodies.
One of the major breakthroughs for the industry will eventually be the offering of an exchange-traded fund, something that has yet to see approval from federal regulators, with crypto exchanges and their often false volume being cited as a primary reason.