Kraken Bug Lets Bitcoin Traders Extract Crazy Profits

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Bitcoin traders at Kraken made about $4,000 of free money thanks to a bug.

The San Francisco-based cryptocurrency exchange on Sunday shared details of an internal error which allowed individual users to purchase bitcoin for $8,000 and sell it later for $12,000. Excerpts from the statement:

“Yesterday a test of an unreleased advanced order type encountered a bug which resulted in the order’s prices being matched against the wrong side of the book. Some clients bought from the tester at $8,000 and others sold at $12,000 without clearing the intervening liquidity.”

Kraken added that the candle hinted at the exhaustion of liquidity between the $8-12k range, leaving the wicks on either side hollow.

“A trade executed at the high and low,” the exchange informed. “But there were no trades throughout, and there were no other orders that were not matched that should have been.”

CEO Reacts

Kraken recommended that affected users could reach their support. But that didn’t stop the community from criticizing the US exchange. CEO Jesse Powell later had to intervene to put water on fire. He tweeted:

“I’m not sure how ‘a legitimate trade for pricing purposes’ is defined. 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.”

While the charts show that some traders might have extracted crazy profits off the Kraken bug, the exchange claims that was not the case. At least they admitted the wrong triggering of stop-loss orders and should compensate the affected users shortly.

Overall, just another day in the crypto land.

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