New research published today has highlighted what appears to be very unusual trading of the stablecoin – Tether (USDT) – on the Kraken cryptocurrency exchange.

The new analysis published by Bloomberg examines Kraken’s trading data for USDT – drawing attention to several conspicuous features which it describes as “akin to defying gravity” in the world of exchanges.

Looking at more than 56,000 trades between May 1st and June 22nd – the study observed two very unusual features in particular:

Firstly, huge trades seemed to have moved prices almost exactly as much as small trades, and often even less – a feature experts view as a “red flag” for market manipulation.

Second, the data revealed a pattern of strangely specific order sizes – some of which extend to over 5 decimal places. Potentially used as a signal to automated trading programs, the report explains that these specific trades might be suggestive of “wash trading” – a tactic banned in regulated markets – where people trade with themselves to create a false impression of market demand.

Prompted by ex-poker player Andrew Rennhack’s speculations about Kraken exchange’s Tether trade data, Bloomberg News investigated the data themselves and shared it with several experts in the field – all of whom agreed that it points to suspicious activity.

Controversy Surrounding Tether

While there is no evidence whatsoever that Kraken exchange itself had any involvement, the study is an important development upon previous research into the stablecoin’s activity.

Examining Tether’s use on popular exchange Bitfinex, a paper published two weeks ago by University of Texas professor John Griffin also indicated that the coin appears to have been used to manipulate the price of bitcoin – a conclusion Bitfinex denies.

Undoubtedly further specific research is essential before more conclusions can be drawn, but crypto investors and regulatory officials alike will pay close attention to the story as it develops.