This Saturday was a disaster for the finance industry. First of all, drone attacks on Saudi Aramco set the stage for sending financial markets into a turmoil, and then leading cryptocurrency exchange Kraken ran into a bug that allowed people to buy Bitcoins at a much lower prices. Cursed situations, but we were put into them… what can we do!
Kraken confirmed the glitch on Sunday in a Twitter thread. It said that the bug resulted from “an unreleased advanced order type” that they were testing. While the normal price of Bitcoin was around $10300 that day, the bug allowed some of the Kraken’s customers to buy it for as little as $8,000 and sell it for as high as $12,000. This happened because the order prices were “being matched against the wrong side of the book”.
Kraken explained that all the trades affected by this bug were on either side of this 8k – 12k dollar spread (i.e. only at high or low) and not throughout it. Stops in the range of $8k – $12k were triggered and filled correctly at market prices, and “there were no other orders that were not matched that should have been”. No liquidity was exhausted.
Now, after all of this was said and done, Kraken CEO Jesse Powell himself also came out on Twitter to defend his company. He said that it’s not possible to detect all the bugs all the time, and the advanced order type that resulted in this bug had already gone through thousands of internal automated and human tests for several months.
Kraken is 56th largest cryptocurrency exchange in the world by trading volume at the moment as per CMC data. However, recently it has been in the news for some wrong reasons.
On September 14th an anonymous wallet had sent 260 million Stellar worth $15 million to it, and now this bug. Fortunately, none of the events have affected majority of Kraken users due to their effective management.