US News Bitcoin price manipulated from $150 to $1,000 by single actor

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… from Russia Today, Moscow

Frankly, I would prefer cash. The moving logistics would not bother me at all 🙂

[ Editor’s Note: Finally we get a professional report giving a peek inside the Bitcoin exchanges to see how trading markets could be manipulated.

I always suspected this to be government run operation as a honey trap for illegally earned money, otherwise govs would have jumped in much quicker to impose regulations. It seemed impossible to me that they would just sit back and watch private currencies appear out of thin air and operate markets.

How long this madness can last is anyone’s guess, and I doubt many will be upset over those who get burned in the end. As P. T. Barnum always said, “There’s a sucker born every minute.”

I stand corrected on my semi-famous, “You just can’t make this stuff up.” They did it, and are still doing it. The question now is why did financial regulators allow it to happen? What benefit did they or the NSA, get watching what would happen with it? Jim W. Dean ]

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– First published … January 16, 2018

Researchers found that a single actor was “likely” behind several accounts that bought millions of dollars worth of bitcoin and drove the exchange rate in the US from $150 to $1,000 over the course of two months.
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BitCoin as a Ponzi scheme comes as no surprise to most

In a paper published in a recent issue of the Journal of Monetary Economics, a team of researchers examined the impact of fraudulent activity that occurred on the leading bitcoin currency exchange in 2013, and found that a single actor was “likely” behind a massive spike in exchange rates.

In their paper, “Price Manipulation in the Bitcoin Ecosystem,” the researchers from Tel Aviv University in Israel and the University of Tulsa examined Mt. Gox transactions over a ten-month period from February to November 2013, and found that approximately 600,000 bitcoins, valued at $188 million, were “acquired by agents who likely did not pay for the bitcoins.”

In an early version of the paper published by the Tandy School of Computer Science at the University of Tulsa, researchers said they discovered a group of users that had “??” as an entry for country and state fields, which usually contain location data or a null value.

After analyzing the accounts with abnormal location values, they found one account named “Markus,” which was different from the rest. Markus never paid transaction fees and “reportedly paid seemingly random prices for bitcoins.”

“Markus likely did not pay for the bitcoins he acquired; rather, his account was fraudulently credited with claimed bitcoins that almost certainly were not backed by real coins,” the researchers wrote.

The Markus account bought a total of 335,898 bitcoins, worth $76 million, over the course of 225 days.

An additional 49 accounts with abnormal location values were grouped into a collection of accounts that the researchers named “Willy.” Each of the Willy accounts bought exactly $2.5 million worth of bitcoin before they became inactive.

The researchers referred to the group of Willy accounts as “Willy Bot,” which they said collectively bought around 268,132 bitcoins for just under $112 million over the course of 65 days.

The paper claims that Willy Bots were allowed to make trades even during the times when the Mt. Gox trading API (application programming interface) went offline for several hours, while no other trading activity was being processed.

The paper states that during a trial in Japan, the former Mt. Gox CEO Mark Karpeles “confirmed that the exchange itself operated these accounts and that the trades were issued automatically.”

The researchers pointed to a Reddit theory, which claims that hackers stole around 650,000 bitcoins in 2011 and Mt. Gox founder Mark Karpales “took extraordinary steps to cover up the loss for several years.”

“By offering to buy large numbers of bitcoins, Willy could prop up the trading volume at Mt. Gox and ‘convert’ consumer ‘bitcoin’ balances to fiat money,” the researchers wrote. “Consequently, this theory holds that Willy was not trying to profit directly from these large purchases, but rather was trying to stave off collapse of the exchange.”

Researchers said the fraudulent purchases had a “very strong positive association” to the “unprecedented” increase in the bitcoin exchange rate, which grew from around $150 to more than $1,000 in two months.

During those two months, the exchange rate increased by more than $20 a day, or an average of four percent. On the days that the suspicious trades were not active, the exchange rate decreased or remained “virtually unchanged,” according to the researchers.

“The publicly reported trading volume at Mt. Gox included the fraudulent transactions, thereby signaling to the market that heavy trading activity was taking place,” the researchers said, according to TechCrunch“Indeed, the paper later shows that even if the fraudulent activity is set aside, average trading volume on all major exchanges trading bitcoins and USD was much higher on days the bots were active.”

The Markus account purchased an average of 9,302 bitcoins on each of the 33 days it was active, accounting for an average of 21 percent of Mt. Grox’s daily activity.

The Willy Bot accounts purchased an average of 4,962 bitcoins each of the 50 days they were active, accounting for an average of 18 percent of Mt. Grox’s daily activity.

Researchers warned that such manipulation could be occurring in current exchanges, and advised regulators to “begin taking an active oversight role as the bitcoin ecosystem becomes more integrated into international finance and payment systems.”

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9 COMMENTS

  1. When Max Kaiser pushed Bitcoin I became suspicious. Then I found out that TOR, the browser giving access to the Dark Web, was developed by the US military, and I realised the whole thing was a PsyOp. Then the MSM began publicising Bitcoin for the masses and I knew the War on Cash had finally begun.

    Cash has to die for Evil Ones to achieve Full Spectrum Dominance. Please everyone, reject this Bitcoin BS.

  2. I suspected the current price of Bitcoin was so out of touch with reality that something was definitely up. The price has been for the past couple months way out of proportion.
    Not that I have anything against crypto currencies, I think it’s a neat idea to be able to skirt around the tax man.

    • When you or I get the tax man, it is for a couple bucks. When the banks adopt crypto, it is skillions. The patents have been filed. The testing period is complete.

  3. Who would not believe the big boys can pump and dump this thinly clad unit. What have they been up to, they want cashless everywhere, hello pay attention when Babylon speaks. Right on Eduardo

  4. Markus and Willy. Will he mark us ? Are you kidding me. YCMTSU
    Some things just should never be called crypto, like burritos, and money.
    10 year Silver….started at $17 ,… and still 17.
    Number of articles over 10 year period touting Silver as a solid investment 92 million billion.
    We learn every day from Insurance companies. Make it so nobody can possibly understand it, and it will sell.
    Muey mucho profeetoes. Los federales no puedes ver ustedes

  5. Greed is like a sticky fly trap. Sooner then later there are more “flies” then the trap can hold and how great that our “righteous governments” can skim what was “stolen” from their Tax accounts and reinvest it with the friends of ISrael. Always great news when “studies” are coming from the researchers of Tel Aviv University in Israel and the University of Tulsa, as an trustworthy American source.
    When the lights are turned off neither bitcoin or US $ will feed any of the flies glued to the greed trap.
    If one wants to “invest”, invest in a garden in your backyard at least the “interest will be tax free” and eatable.

    • Absolutely. Bought a new tiller last fall at a great price and invested in drip irrigation.
      Buy only non GMO, heirloom seeds. Brandywine tomatoes…..yum.

    • Great to hear JohnZ. I always have “Krim tomatoes” growing if the sun and weather permits. Lately much get scorched by the “white sun”. Ever tried Krim tomatoes or “black Russian tomatoes”? They are a treat compared to what is sold in supermarkets or vegie shops.

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