Reports Indicate Kraken’s Trading Engine Can Mess Up During Periods of High Trading Volume

Using a centralized exchange can often cause a lot of unexpected problems. If these exchanges encounter an issue, it is only a matter of time until users feel the effects. In most cases, orders can take a lot longer to be executed than normal. However, various Kraken users are complaining about the exchange’s API returning anomalous market data.

Kraken’s Issues Need To Be Addressed

A lot of cryptocurrency traders rely on major centralized exchanges, such as Coinbase, Bitfinex, and Kraken. This latter exchange has seen its fair share of problems over the past few weeks. In fact, some evidence suggests the platform has suffered from a few API issues on May 24. More specifically, the API returned some market data which is anything but correct, and traders suffered from market losses as a result.

According to the information we have received, the Kraken API displayed the ETH_BTC value as 7.84700000. Additionally, the ETH/BTC trading volume at 06:48:01 GMT was, according to the API, 965081.17044787. On their own, these numbers do not mean much to the untrained eye. APIs often return such numbers without anyone seeing an anomaly, so what makes this particular incident different from all the rest?

First of all, it is important to note the Kraken exchange was dealing with an increased amount of trading volume at that time. Centralized exchanges do not always perform as they are supposed to when things like these happen. Whereas one could argue the API values are display glitches, they were actual trades occurring on the Kraken exchange. This has been confirmed by at least two different users.

Moreover, the reported values are unnatural market events, since out-of-order-book trades should not occur by any means. For some reason, these trades did occur, resulting in financial losses for multiple users. One Kraken trader lost around $46,000 worth of the Ethereum due to these automated sell/liquidation market orders destroying his current position with a -99% loss. Other users saw their account balance turn negative, as orders kept getting executed without them being visible on the order book.

Some people will argue these events are random, and bugs can occur at any given time. That is certainly true, but it also highlights a bigger underlying problem. It appears Kraken’s trading engine does not play nice with high trading volume. Anyone using the exchange can see their portfolio liquidated rapidly if these errors are not addressed quickly. Moreover, it does not appear the company will compensate users suffering from these incidents either.

So far, Kraken has not officially acknowledged the problem, despite there being clear evidence of these mishaps. No one knows if issues like these could still occur when the trading volume increases in the future. It was evident something was going wrong with the exchange on that day, as the price charts reflected major red trading candles while the order book showed nothing.

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