Market Integrity
What is Market Surveillance?
Imagine playing a game where some players use cheat codes to gain an unfair advantage – that wouldn’t feel right, would it? The same applies to trading. Market surveillance is one measure we use to help build a fairer and more transparent marketplace by aiming to detect and prevent abusive tactics that distort prices and harm honest participants like you. This kind of manipulation increases volatility, erodes trust, and makes markets less stable. At Kraken, we strive to keep the playing field level so you can trade with confidence.
Why Do We Monitor the Market?
At Kraken, fairness isn’t just a belief – we’ve dedicated great resources to strive for it. A fair market gives every participant an equal chance to succeed, and we work to keep it that way. We actively monitor trading activity, mitigate risks, and take action against market abuse, fraud, and manipulation to ensure a trusted marketplace for all.
It’s not only about complying with applicable laws and regulations – it’s about preserving your trust and maintaining a safe, transparent, and level playing field where you can trade with confidence.
What Do We Watch For?
At Kraken, we monitor the market to help make things fair, transparent, and safe for you. Some participants try to manipulate prices, create false market trends, or use inside information to gain an unfair advantage. These dishonest tactics can harm honest people like you, disrupt price movements, and reduce trust in the market. That’s why we use advanced monitoring systems aiming to detect and prevent market abuse.
Here are some of the key practices we watch for, along with real-world examples of how they work:
- Spoofing & Layering – A trader places one or more large non-genuine orders on one side of the market to create false supply or demand, before then cancelling them before they are filled. Generally, the intent of spoofing is to move the market towards the traders own genuine orders, on the opposite side of the market, which they do intend to fill.
Example: A trader places a large sell order to make it look like there’s high selling pressure. As the price drops, they remove the fake order and buy at the lower price, profiting from the price drop they just created.
- Wash Trading – This happens when a trader (or multiple traders working together) buy and sell the same asset to create artificial market activity.
Example: A trader buys and sells the same asset, making it seem like there’s a lot of trading happening, even though there has been no change in owner.
- Insider Trading – This happens when someone trades based on private, non-public information before the rest of the market knows about it.
Example: A trader finds out early that a major exchange is about to list a new cryptocurrency. They buy large amounts before the news goes public, generally selling after the price jumps, leaving other traders at a disadvantage.
These are just some of the abusive practices we monitor for – our surveillance program is designed to detect a wide range of market manipulation types that could harm honest traders like you. By addressing these tactics, we help maintain Kraken as a fair, transparent, and trustworthy marketplace where you can trade with confidence.
Know the Rules: The Consequences of Market Abuse
At Kraken, we believe in fair and honest trading – and we expect all our clients to do the same. That’s why our Terms of Service clearly outline what is and isn’t allowed when trading on our platform, including a strict prohibition on using our content to engage in, fund, or support any illegal, fraudulent, deceptive, or manipulative activity, all of which may constitute market abuse. Engaging in manipulative, deceptive, or fraudulent trading practices doesn’t just go against our policies – it can have serious consequences for your account and, in some cases, even legal repercussions.
So, what does this mean for you? Simply put: play fair or risk losing access to our platform. We can take immediate action, including:
- Suspending or restricting your account – You may lose the ability to trade or withdraw funds.
- Freezing or closing your account – In cases of serious misconduct, we can permanently disable your account.
- Reporting to authorities – We may be required to report to regulators or law enforcement.
Stay Compliant, Stay Protected
We understand that not all market participants have bad intentions. That’s why we encourage all our users to review Kraken’s trading rules and policies, which you agree to upon creating an account. These guidelines, outlined in our Terms of Service, are designed to protect you and maintain a fair trading environment.
By following the rules, you’re not just protecting your own account – you’re helping us maintain a safe, transparent, and trustworthy marketplace for everyone. If you ever have questions about our policies, we’re here to help.
See Something, Say Something: Reporting Market Abuse
Manipulative practices don’t just affect individual traders – they can disrupt the market, distort prices, and reduce trust in the crypto ecosystem. That’s why your vigilance matters. Whether you notice unusual trading patterns, suspicious price movements, or other signs of abuse, letting us know helps us take action to keep the market fair for all. If you see or suspect any suspicious trading activity, we encourage you to speak up. Market abuse hurts all traders, and by reporting it, you’re helping us protect the integrity of the platform.
If you believe someone is engaging in market abuse, fraud, or other prohibited activities, please reach out to us directly via Kraken’s Support Center. Every report is taken seriously and handled with discretion. Our team thoroughly investigates all disclosures and takes appropriate action when necessary.