there is a very clear aspect here of blaming China for the problems, when it's clear the corruption is not coming from China.
I do not get what you are getting at. It is obvious that there was foul play at MtGOX, and China does not seem directly responsible for it (although, if it was indeed arbitrage as I believe, there may have been other people involved at the other end.)
The "arbitrage hypothesis" does not change the basic fact claimed by the Willy Report: someone inside MtGOX bought bitcoins from clients, but instead of paying them with real dollars (as the clients thought) paid them with fictitious "goxDollars", mere IOUs without any backing assets. That, I suppose, is a crime in itself. Presumably the buyer thought that he could get real dollars in time to make good on those IOUs, without the clients ever knowing. Of course the goxDollars were as good as real dollars in raising the price at MtGOX.
The only contribution of the "arbitrage hypothesis" is the claim that those bitcoins were sold in China, and that the price at MtGOX merly tracked the 2013 bubbles, instead of creating them.
well this is the basic problem, that they are inflating the price of BTC. The plan was to make a pump and dump scheme, get people to buy in, and then get out before the music stops. The problem was the Chinese exchanges who were not in on it, and probably took off with some of the money.
note that the suicide CEO exchange was in Singapore, which is a typical financial mediator between Asia and various Western countries. Not completely sure what happened here but it seems likely this is part of the puzzle.
-bm
