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As they say, shots were fired.
An investigative article raising concerns about possible market manipulation of tether has sparked a social media firestorm, with the dollar-pegged cryptocurrency's detractors, supporters and seemingly everyone in between weighing in.
In an incendiary take on an already controversial topic, Bloomberg analyzed tether trading data from the Kraken crypto exchange and found several "red flags," as the headline described them.
Tether Code 'Flaw' Was Actually an Exchange Error
Complete with colorful annotated charts and interactive data visualizations, the article published Friday sought to characterize the market for tethers, also known as USDT, as defying the laws of supply and demand, going so far as to say it is suggestive of wash trading â a maneuver "in which cheaters trade with themselves to create a false impression of market demand."
Some hailed the data analysis, which pulled from more than 56,000 trades on Kraken over a period of eight weeks, as a "deep dive into suspicious trading patterns," and a prime illustration of "why institutional money is staying out of the market."Â
Release the Kraken
But then Bloomberg, for better or for worse, became part of the story.
On Sunday, Kraken published a characteristically combative blog post rebutting the analysis by the four Bloomberg reporters who contributed to the article.
Bitfinex's Chief Strategy Officer Leaves Crypto Exchange
The post, whose very title ("On Tether: Journalists Defy Logic, Raising Red Flags") was a dig at Bloomberg's headline, went so far as to suggest that the authors of the piece lacked subject matter expertise, saying:
"It's scary to think that our lawmakers are reading this stuff. The title sure was sensational, and it undoubtedly grabbed eyeballs but what of the readers who are not following the outrage on Reddit and Twitter? What of those who rely on the journalistic integrity and expertise of their news sources?"
Others appeared to agree, with varying degrees of tact.
But the pushback was not limited to ad hominems. Specifically addressing the article's contention that heightened demand for USDT on Kraken should have temporarily driven the coin's price up to $1.10, one Reddit user argued that arbitrage opportunities keep the price close to $1, writing:
"Of course we're not seeing that as Kraken USDTUSD divergence from $1 is equal to Bitfinex cryptoUSD premium or discount. A 1.1 dollar USDT would mean a ~10% discount on Finex. It shouldn't be that hard to comprehend."