Conversation

· Jun 29, 2018

So today’s article by @mattleising on Tether and Kraken is really interesting. I love the data analysis approach. For me, the big question is the recurring numbers. Who is doing this and why? Who benefits? bloomberg.com/graphics/2018-

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Were your questions answered in the blog post? If not, feel free to post here and I’ll see if I can answer. blog.kraken.com/post/1664/on-t

Alright, thanks. They are not covered in the blog post, different focus than the Bloomberg article itself. 1. How come there are these reoccurring order sizes on the Kraken USDT/USD trading pair (Twitter screenshots below show 1000, Bloomberg article also shows many 75)?

2. Why do these reoccurring orders alternate between buy and sell orders? I.e. the two screenshots are half an hour apart 3. Do these orders, and the alternating buy and sell orders, raise red flags to Kraken or not? Since you have all the monitoring data, what are we looking at?

4. Who is behind these trades? Not asking to identify, but is this one trader (or entity) or a few (<10) or are we talking many? 5. How are these trades - in your view - beneficial for those executing them? Or how could they be?

4. Can't say but it doesn't matter. 5. Making money arbing on other exchanges, or maybe market maker paid by Tether with volume reqs, or maybe they think they're going to get fee discounts for the volume, or maybe they're testing bots before launching on other markets.

Thanks for answering. Re: 5, not sure how the alternating buys and sells can relate to arbitrage, it shouldn't be a pattern? Tether market maker/pursuing fee discount could be an explanation, but isn't that a form of creating ‘fake’ volume? There are USDT trading fees right?

I know you have had wash trading accusations regarding the pair. Although that should work as a signal to pump, which makes little sense for USDT, it does appear to relate to creating volume. Would you agree or not? Not seeing how it's malicious either (though can't rule it out).

Also had witchcraft allegations which cannot be ruled out either. I don’t know what it would signal but no evidence so far of anything malicious.

witchcraft, interesting 😄. 'Cannot rule it out' relates to 1) you have access to much more data than me or anyone else. You undoubtedly also have much experience with catching malicious activities.

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