Some Kraken clients were buying Bitcoin (BTC) for $2,000 cheaper than the market price and selling it for nearly $12,000 on Sept. 13.
On Friday, United States-based crypto exchange Kraken experienced a bug that allowed some users to buy or sell Bitcoin at a notably different price from Bitcoin’s actual market price due to a reported system bug.
On Sept. 14, Kraken posted a Twitter thread explaining that the bug resulted from testing an unreleased advanced order type. While Bitcoin was trying to hold $10,300 mark on the day of the reported system glitch, the exchange wrote that some clients “bought from the tester at $8,000 and others sold at $12,000 without clearing the intervening liquidity” through the bug.
Bug on Kraken on Sept. 13. Source: Twitter
Kraken CEO steps in to defend the exchange
Kraken explained that the bug led to executions on either side of the $8,000–$12,000 spread, while no liquidity was exhausted. The exchange stated that stop market orders were correctly filled at market price, and suggested that affected clients submit a support ticket.
The crypto community subsequently reacted to express outrage against the major exchange allowing such a big bug, while Kraken co-founder and CEO Jesse Powel stepped in to defend the exchange. Powel claimed that the tested feature had already seen thousands of automated and human tests over several months, adding “you can’t find all the bugs all the time.” He wrote:
“Agree that matching at trade to the wrong side of the book is an exchange error. Everything that happened after that worked as expected. Trade printed, stops triggered, other orders matched just fine.”
At press time, Kraken is the 56th biggest crypto exchange by adjusted daily trading volume of $97.9 million, according to CoinMarketCap. On Sept. 14, an anonymous wallet sent 260 million Stellar (XLM) worth over $15 million to Kraken, as reported by tracking service Whale Alert.
The recent error has apparently had no significant effect on the market, as Bitcoin continued to hover around $10,300 until it suddenly slipped $200 on Sept. 16.
Bitcoin seven-day price chart. Source: Coin360