Business

Derek Tonin

Cheap BTC offered as Kraken bug messes up order book

Buy the lows, sell the highs. That’s how asset investment is supposed to work if you’re doing it right, and for most financial exchanges, it’s a good recipe to make profit. Not on Kraken though, where a recent bug allowed traders to buy at the lowest buy prices, and sell at the highest buy prices.

Kraken is apparently working on an advanced order mechanism. While it’s unreleased, a bug allowed traders to interact with one of the testers a little bit early.

As a result of the unintended sneak peak, some lucky traders were able to trigger trades at the wrong ends of the order book. Buying SegWitCoin (BTC) for $8,000 and selling for $12,000 is a nice way to quickly make a tidy profit.

On Twitter, Kraken downplayed the event, noting that anyone outside of the specific affected trades should have been affected, but still provided resources for anyone affected by the event.

One would hope that a large exchange like Kraken, with a reported $100 million or more in volume daily, would have a proper test server to work out the bugs of their new services before they come anywhere near real money and customers. Apparently, that’s either not the case, or they just didn’t work out enough of the bugs yet.  

This amateur mistake is embarrassing, and maybe even costly for Kraken, but it’s not entirely surprising. While Kraken has tried to build an image as the good guys of the crypto industry, they’ve been revealed in the past to have lax security and an easy target for hackers. If they aren’t currently the target of a crypto scam, why not keep things lively by creating problems internally?

This is the kind of problem regulators are trying to fix, by raising the bar on exchanges to force them to act more professionally, and invest in tools and procedures to safeguard both customers and the market as a whole against crime and incompetence. While Kraken chided QuadrigaCX for its problems in early 2019, they’ve fought against regulations that would limit their own actions. As a result, we end up with an exchange that can’t even decide if it should buy or sell at market highs.

To receive the latest CoinGeek.com news, special discounts on CoinGeek Conferences and other inside information direct to your inbox, please sign up for our mailing list.

COMMENT

[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]