Monday, 13 July 2020

Kraken sounds warning against ‘phishing’ involving Punycode lookalike; troubled waters ahead?

Kraken, the American cryptocurrency exchange that often skirts the line between being a real exchange and having a flawed exchange order and liquidity system, has once again run into a spot of bother.
However, not with veteran trader Peter Brandt this time around. Instead, it is with malicious players operating a phishing ploy.

On June 21, as Bitcoin was beginning its ascent over the four-figure range, the Jesse Powell-led exchange sounded a warning to its customers that a “scam” involving the use a lookalike Punycode was in the works. These attempts were channelized via e-mails and tried to use Kraken domain names.

The exchange added that customer diligence helped resolve the matter. However, aware token teams began to report these “scams” to Kraken.

In a word of caution, the San Francisco-based exchange tried to remedy the the situation by advising customers to check the headers of emails and unfollow suspicious links, while also asking them to not click on email attachments and limit any information leakage. Finally, the exchange reiterated that it does not charge any listing fees, indicating that this “scam” targeted token issuers as well, with malicious actors funneling funds in exchange for fees to list the tokens.

Kraken’s warning read,

Security alert: Phishing/scam attempts by email from punycode lookalike Kraken domains are being reported by token founders/teams. Check full headers. Do not follow links, do not view attachments, do not provide requested information. Kraken does NOT charge listing fees.

— Kraken Exchange (@krakenfx) June 21, 2019

Over the past few months, with Bitcoin exhibiting a massive parabolic rise, Kraken has seen a few chinks in its armour. On several occasions, the exchange’s reflection of the price of the top cryptocurrency fluctuated, when compared to its peers, with its liquidity being called into question.

During the close of March, Peter Brandt had graded Kraken an “F,” stating that without stern measures to control price manipulations, regulations would become necessary. Brandt cited the case of Kraken’s XBT contracts dropping to $8,000, while the price of the coin was well over $8,700 at the time.

Towards the close of April, when the New York Attorney General released its report on the Bitfinex-Tether episode, the price of Bitcoin dropped from a high of over $5,500 to under $5,200. However, BTC’s price on Kraken saw a peculiar dump, dropping below $4,500 before the price climbed quickly back up above $5,100. Following the fiasco, many crypto-proponents opined that “dirty spillage” on Kraken’s “illiquid book” led to this obscure market movement, in stark contrast to the collective market.

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