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Cryptocurrency exchange Kraken has updated users on a new bug that allowed certain clients to buy BTC at $8000 or sell at $12000.
Kraken Exchange Bug
According to the notice published to Kraken’s official Twitter account, the exchange was testing an unreleased advanced order type when it encountered a bug.
The glitch led to a system error where orders were priced against the wrong side of the book. Certain clients were able to purchase bitcoin at $8,000 per coin while others were able to sell at $12,000 against the tester without an intervene in liquidity being cleared (despite the market price of BTC hovering around $10,300).
1/3 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 $8000 and others sold at $12000 without clearing the intervening liquidity. pic.twitter.com/iG3sEPCVXS
— Kraken Exchange (@krakenfx) September 14, 2019
Kraken explained that because of the bug, orders were executed on either side of the $8K - $12K spread, without any liquidity in between being exhausted. However, stop orders were apparently triggered and correctly filled.
2/3 While the candle gives the impression that liquidity was exhausted between $8-12k, the wicks on either side are hollow. A trade executed at the high and low but there were not trades throughout and there were no other orders that were not matched that should have been.
— Kraken Exchange (@krakenfx) September 14, 2019
3/3 Stops in the range of $8-12k were triggered. Stop market orders were correctly filled at market price (best bid/ask available). For questions about this incident as it relates to your account, please submit a support ticket: https://t.co/9Qcmquwe1T
— Kraken Exchange (@krakenfx) September 14, 2019
Community members were quick to criticize the exchange for allowing such a significant bug to occur on a test that was being run in a live market.
Agree with this. Pretty mental to run tests like this on the live market. To hell with stability
— Nigel (@NigelEvans4219) September 14, 2019
Jesse Powell, co-founder and CEO of Kraken, defended the exchange’s actions by explaining that products have to be live-tested eventually, even if there is a chance of error.
You’re arguing for going straight from test env to full public rollout without a production limited beta? You have to go to prod at some point. This particular feature had already seen thousands of tests over several months. This just reinforces our careful, staged approach.
— Jesse Powell (@jespow) September 14, 2019
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