Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 30609. (Read 26710965 times)

But is not your concept extremely broad?  Would not that mean that every used-car salesmen who pushes a bit too hard is fraudulent? 

Examples of fraudulent market manipulation:
....
LOL. All of the above are regular activities in bitcoin land.

Anything calculated to mislead others is fraudulent.

Your concept of fraud is stupidly narrow

Shit if crypto was regulated I think half the users of btce would go to jail.

Still can't believe that idiot didn't have his coins spread out or even in a brain wallet. The best outcome for the coins is they are sold at auction. I really doubt these coins would be sent to gox and then sold off in a huge A-Bomb. The US government may be inept at many things but they would be smart enough to get a good price for their coins. The worst outcome would be they become property of the NSA/CIA/FBI/FED.

Pools: "Agreements, often written, among a group of traders to delegate authority to a single manager to trade in a specific stock for a specific period of time and then to share in the resulting profits or losses."[4]
Churning: "When a trader places both buy and sell orders at about the same price. The increase in activity is intended to attract additional investors, and increase the price."
Stock Bashing: "This scheme is usually orchestrated by savvy online message board posters (a.k.a. "Bashers") who make up false and/or misleading information about the target company in an attempt to get shares for a cheaper price. This activity, in most cases, is conducted by posting libelous posts on multiple public forums. The perpetrators sometimes work directly for unscrupulous Investor Relations firms who have convertible notes that convert for more shares the lower the bid or ask price is; thus the lower these Bashers can drive a stock price down by trying to convince shareholders they have bought a worthless security, the more shares the Investor Relations firm receives as compensation. Immediately after the stock conversion is complete and shares are issued to the Investor Relations firm, consultant, attorney or similar party, the basher/s then become friends of the company and move quickly to ensure they profit on a classic Pump & Dump scheme to liquidate their ill gotten shares. (see P&D)"
Pump and dump: "This scheme is generally part of a more complex grand plan of market manipulation on the targeted security. The Perpetrators (Usually stock promoters) convince company affiliates and large position non-affiliates to release shares into a free trading status as "Payment" for services for promoting the security. Instead of putting out legitimate information about a company the promoter sends out bogus e-mails (the "Pump") to millions of unsophisticated investors (Sometimes called "Retail Investors") in an attempt to drive the price of the stock and volume to higher points. After she accomplishes both, the promoter sells her shares (the "Dump") and the stock price falls like a stone, taking all the duped investors money with it."
Runs: "When a group of traders create activity or rumors in order to drive the price of a security up." An example is the Guinness share-trading fraud of the 1980s. In the US, this activity is usually referred to as painting the tape.[5] Runs may also occur when trader(s) are attempting to drive the price of a certain share down, although this is rare. (see Stock Bashing)"
Ramping (the market): "Actions designed to artificially raise the market price of listed securities and to give the impression of voluminous trading, in order to make a quick profit."[6]
Wash trade: "Selling and repurchasing the same or substantially the same security for the purpose of generating activity and increasing the price".
Bear raid: "Attempting to push the price of a stock down by heavy selling or short selling."[7]

I've no doubt manipulation is going on, that's what happens when humans trade in something with no regulation. As a trader I need to be aware of it and profit from it when I can. It does make trading difficult atm though with such low volume because all it takes it ONE whale to sell a couple of hundred btc and all of a sudden we're crashing.

My biggest fear for btc in the very long term is not manipulation but the 173k btc the FBI have confiscated from the closing of Silk Rd. I understand Ulbricht has claimed the return of the btc, claiming that as virtual currency they cannot be forfeit as a proceed of crime, but seeing that judges confiscate anything of value in such cases he's on pretty thin ice. I believe these coins will eventually end up in the hands of the US government who will have far too much power - just think, 173k coins all sold on same day. It's a while off (I've no idea when this is coming to court or how the US government usually deal with liquidation of confiscated assets) but this is what we should be worried about.

Interesting debate guys regarding market manipulation.  I think aminorex's definition below is a good one (regardless of one's views on the ethics of such an activity):


According to this definition, I believe that market manipulation is indeed happening.  The next question is "is this wrong"?  vdcc says this is fraud:


I'm not convinced, but I'd like to hear further arguments.  Here's what I think is fraud:

A whale calls up the owner of an exchange and, says "I want to put up a 5,000 BTC ask wall to scare the fish into selling to me for cheaper, but I don't actually want to risk a bigger whale buying all my coins.  Can I pay you 50 BTC to ensure that if someone tries to buy my wall that your trading engine encounters 'technical difficulties'?"  If the owner agrees, this is fraud and we have laws that would apply in such a situation.  

But if two colluding whales buy and sell to each other on the open market to try and make it appear there is more volume at a price higher or lower than what they believe to be the market price, then could not one argue that this is simply "strategy"?  Is not everyone still playing by the same rules?

Shavers sought to dismiss the charges, arguing that Bitcoins were not the equivalent of money, were not regulated by the United States, and that the BTCST investments did not meet the definition of “securities” to confer jurisdiction with the Commission.  The Commission disputed Shavers’ contentions, arguing that the BTCST investments  were both investment contracts and notes and thus constituted securities.

The Securities Act of 1933 defines a “security” as “any note, stock, treasury stock, security future, security-based swap, bond…[or] investment contract…” 15 U.S.C. § 77b.  An “investment contract” is considered to be a catch-all category for products that do not meet the exact contours of a note, stock, or other specified form of indebtedness.  As federal securities laws have remained largely unchanged since their enactment in the 1930s and 1940s, courts have increasingly had to determine whether a product constituted an investment contract.  The seminal case on this subject is S.E.C. v. W.J. Howey Co., 328 U.S. 293 (1946).  In Howey, the U.S. Supreme Court set forth a three-part test to answer this question, holding that

An investment contract is any contract, transaction, or scheme involving (1) an investment of money, (2) in a common enterprise, (3) with the expectation that profits will be derived from the efforts of the promoter or a third party.

In analyzing the Howey factors, Judge Mazzant first found that the BTCST investments constituted an investment of money, noting that Bitcoins could not only be used as money to buy goods and services but also could be exchanged for conventional currencies.  Next , Judge Mazzant determined that there existed a common enterprise since the investors were dependent on Shavers’ purported expertise in Bitcoin markets and local connections, and investors were promised a substantial return from these efforts.  Finally, there was clearly an expectation that profits would be derived through Shavers’ efforts, as investors were induced to invest through the promise of the astronomical returns.  In short, Judge Mazzant concluded that the BTCST investments satisfied the Howey test and could be considered securities.

Wasn't there a huge incident when an auditor's account got hacked and lots of BTC was stolen? Was that Mtgox? Sorry don't recall the exchange without looking it up.

I agree this is fraud, as I don't expect the exchange owners to do this. (I wish they stated clearly how they stand in such cases). This is probably unlawful. Even regarding this, I do not want regulation, because a) regulation invites to corruption b) excessive regulation and control leads to erotion of ethics on the part of the exchange ( anything that is not expressly forbidden will seem ethical, ref current situation with the banks) and mostly, c) it leads to complacency among the traders, who will not care to evaluate the exchanges themself, but blindly trust the regulators (ref the Madoff example). Another thing is a voluntary organization to check on the exchanges for their members, that could be useful. Now we have only the press and this forum, which is better than nothing.

Interesting debate guys regarding market manipulation.  I think aminorex's definition below is a good one (regardless of one's views on the ethics of such an activity):


According to this definition, I believe that market manipulation is indeed happening.  The next question is "is this wrong"?  vdcc says this is fraud:


I'm not convinced, but I'd like to hear further arguments.  Here's what I think is fraud:

A whale calls up the owner of an exchange and, says "I want to put up a 5,000 BTC ask wall to scare the fish into selling to me for cheaper, but I don't actually want to risk a bigger whale buying all my coins.  Can I pay you 50 BTC to ensure that if someone tries to buy my wall that your trading engine encounters 'technical difficulties'?"  If the owner agrees, this is fraud and we have laws that would apply in such a situation.  

But if two colluding whales buy and sell to each other on the open market to try and make it appear there is more volume at a price higher or lower than what they believe to be the market price, then could not one argue that this is simply "strategy"?  Is not everyone still playing by the same rules?

BitPay is in fact way ahead in the game.

They are one of the big players doing the real arbitraging.

They have an internal engine where they pull all bid & asks from all exchanges and always get the best prices.

Source is Gallippi himself, during a conference 3 weeks ago. They surely have OTC deals and shadier stuff as well.

Their business grows with Bitcoin and also makes Bitcoin grow, plus we know they are in good standing with the US Gov.

Yeah... I wouldn't worry too much about BitPay. In fact, recommend them (or coinbase or whatever) to every merchant you know. It'll be good for us all.

Yea, but my point is the price goes down if too many large merchants are immediately converting. Bitcoin can probably handle Overstock. But what if Amazon, BestBuy, Newegg and others all decide to accept bitcoin in 2014? That would require MASSIVE amounts of new fiat to continually flow into the exchanges to keep the price from plummeting. Possible, sure. Likely, no.

Isn't what BitPay does with its BTC more important then what Overstock does with it? Or maybe we can start a whole new group of activists who support merchants who don't instantly convert their BTC to fiat at the POS.

exposure, and increasing the ease of purchasing goods with bitcoin is never bad. People might skip buying 5 dollars min fee prepaid credit cards and or ukash and just use bitcoin for online purchases.

Well, the point is that more merchants accepting bitcoin is typically viewed as bullish. I disagree if the merchants intend to immediately convert back to fiat.