Topic: Proof of massive fraudulent trading activity and how it has affected the price (Read 4398 times)

Maybe you are right but denying the price impact of buying nearly 650K BTC in three months is nonsence. That's quite a massice buyer pressure.

A very good point:
.
.
.
http://www.reddit.com/r/Bitcoin/comments/26is61/the_simplest_explanation_is_usually_the_right_one/

I'm a little surprised that so many people are jumping straight to conspiracy theories in the last 48 hours following the "Willy Report". It especially surprises me because Willy follows the exact same patterns that so many people here have theorized would be done by "whales".

Imagine you are a high value trader or company. You want to enter bitcoin or increase your position. Do you really think you would simply open up a regular trading account on MtGox, put millions of dollars into your web account, and start making million dollar trades? Absolutely no way. I've worked for two large Wall Street banks, and I can tell you flat out that high value clients have access to products and services that "normal" people do not. High value clients have dedicated staff to service them, they get taken out to dinners and events, they have exceptions done for them, they simply operate outside of the normal world that you and I live in.

Willy didn't pay fees or fiat because it operated outside the purview of what a normal trader would have to do. High value clients would have direct relationships with MtGox, and would likely have special fee structure in place that they would pay to MtGox separately and at a different time than trades. Willy didn't back up trades with fiat because fiat was likely wired to MtGox separately, in bulk.
Willy only bought because these high value clients weren't looking to really "trade". They were looking to enter the market, and likely couldn't find enough early adopters off-market to facilitate their needs. So, they had to go on-market. Second Market has publicly stated that they started having issues finding off-market individuals to buy from. What then? Just stop buying? Absolutely not. They instead needed to start coming on-market. However, you can't simply start making buy orders for several millions dollars. So instead, MtGox would offer an automated API that was directly connected to their servers (just like Mark said) and could make small buys at frequent intervals so as to try to not influence the market too much and cause the price to go skyrocketing.

Willy had "??" in data fields because Willy likely facilitated several different clients at once. There is no grand conspiracy there.

Again, I'm surprised that people aren't coming to these simple conclusions, especially since this is exactly how all of us have assumed "whales" work. What we're seeing in Willy is exactly what we expected to see in whales.

Also, does anyone really think that Willy, a bot that was a small percentage of MtGox's volume, could really single-handedly incite an entire bubble when there were at least 2 or 3 other similarly sized exchanges? The truth is that Willy was just one form of high value clients entering the market on one exchange. Other exchanges likely have their own forms of "Willies" that contributed to the bubble just like it did on MtGox. And trust me, those "Willies" are no more conspiratorial than this MtGox Willy is.

It's not like he made 4 separate posts breaking up my own post into 4 dis-coherent segments and contributing nothing intellectually to my remarks whatsoever.

Yes slightly mad, yes mildly butthurt and I'm possibly having my jimmies rustled.

i dont think this willy story caused the price to spike.

if the bot buys for real there must be a seller and wily owner had to pay them out in fiat. like a real trade.

if the bot buy not for real than the rate of (real) buyer and seller remains the same.

the report may be true about the activity of the bot but it plays up his impact very much. there maybe was a psychological impact, but this was rather little.

Also, the Chinese exchanges don't have the ID requirements of others.

Something extremely shady is brewing on Chinese exchanges that will make Mt.Gox look mild in comparison.

A week or two ago I found a Chinese article that (through Google Translate) seemed to say that the Chinese exchanges made money from (1) interest on leveraged trading, (2) trading on insider information (e.g. about bank closures) and (3) high-frequency trading; with (2) and (3) being of course against their own clients, who were not happy once they started noticing that.

(Unfortunately I lost the link to the article, so feel free to doubt my memory and understanding.)

If true, those complaints (channeled through some consumer protection agency) may have motivated in part the "five exchanges's" agreement of early May; which may have caused the end of the Feb-Apr downtrend and the recent rally.

I bet some variant of this Gox scam is still happening on Huobi or OKCoin. All the insanely big buys that pump the market globally seem to happen over there. What kind of rational person would have millions on Chinese exchanges that are in regulation violations? I will probably get back to this post once Huobi or OKCoin are exposed for continuing the Gox ponzi scheme.

Akin to the Amish having a cottage industry set up based on their ideals to help feed their families, until a light bulb went off in some investor's head, and suggested, "Nice little brand you have going on here..."

Then it was neatly packaged to other investors, to now we have Amish-crafted products produced in China, et al.

Bravo to the author of this article. Very convincing indeed, but I do not have the time to go through the same analysis that the author went through, so I'll just take his word for what it is.

Assuming this to be 100% correct, then how is it still free market when you don't know if other large exchanges like btc-china, bitstamp, or btc-e are doing the same thing? The only way the mtgox order book was analyzed was because the database was leaked. You can't expect other exchanges to conveniently leak their database for you to verify.

Patrick Byrne had shown many times that the REAL wall st. is a scam and unless you're in on this scam you cannot raise capital.

I don't think I need to explain here how the US Dollar and the Euro also have similar biases.

-bm

do you guys think if bitcoin reaches a very high market cap.. that it would still be heavily manipulated? i'd think so.. by then a lot of major players will enter the game and they will collude to swing hard.

In what way does this answer the question?

have you ever played the game 'Musical Chairs'?  It's very similar, and they know when the music is going to stop.

-bm

That Willy article, while entertaining, is full of holes.

The main question is unanswered? Who did it and for whose benefit?

This. After the mtgox fiasco, many exchanges (specifically alt coins) were supposedly "hacked" and had funds "stolen".

And he did get away with it.
Other exchange owners, upon noticing this, will surely be quite tempted to pull off a similar crime, no?
And we all know what that will do to the BTC price and real world adoption. The media will have a field day, again. Thus, the Average Joes will stay far away from anything Bitcoin-related.

I guess Mark thought he could get away with it.

The interesting question here is what percentage this fake money accounted for out of the fiat flow into the Bitcoin market. We're talking about ~half a billion fake dollars that Gox printed - how much real money entered the game during the latest price increase?

Imagine, if you will, for it's a stretch, somebody operating said minor exchanges to benefit due to the contrived arbitrage opportunities. No wonder Sunlot wanted to get their hands on Mr Gox ASAP.

Agreed someone can't say that. When one exchange pushes price up or down its natural the others follow to a certain extent because of the web trade possibilities. Except when gox was crashing but that's because no one could get fiat out.

The exchanges are all going to be very close to each other in price (assuming of course you can get money in/out of each). Anything anything of them does to force the price up or down, is going to be mirrored in every other exchange whether they like it or not

2) I think Willie accelerated and pushed the envelope higher than it otherwise should have been, but remember, the other exchanges did naturally achieve these prices on their own. Bitstamp and BTCe were both over $1000 and China actually outpaced Mt.Gox during the November bubble. Think of it like them starting a fire, they provided the kickstarter and everyone else brought the jet fuel.

If Gox fraudulently inflated the price to $1000 then of course the other ones were going to be dragged up alongside it. If they didn't, there would be huge arbitrage opportunities of buying coins everywhere else and selling them on Gox.

How can you say other exchanges naturally achieved those prices on their own?

Also, let me leave you with a tidbit. Instead of measuring the distances between the peaks... measure the distance between the peak and when the market finishes it's reversal and starts heading up again (e.g like this past month when we switched from bear to bull market) and tell me what you find. I think it's even more alarmingly consistent across the price since day 1.

There have been several allegations of price fixing and fraudulent transactions on some of the big exchanges. It's even more prevelant on some of the smaller ones that deal with all these crappy alts that are pumped and dumped.

In the end, to be honest, it might have actually been the best thing that could have happened because at the expense of half a billion (in current value) of peoples money we might never have breached $32 again, or it might have taken years longer.

Bravo to the author of this article. Very convincing indeed, but I do not have the time to go through the same analysis that the author went through, so I'll just take his word for what it is.

Assuming this to be 100% correct, then how is it still free market when you don't know if other large exchanges like btc-china, bitstamp, or btc-e are doing the same thing? The only way the mtgox order book was analyzed was because the database was leaked. You can't expect other exchanges to conveniently leak their database for you to verify.

Just read the report. It's disappointing that the price can be manipulated in such a way. I'm inclined to believe this was all an inside job by Mark rather than hackers.