To many it was obvious that markets of bitcoin, at least, manipulated by several large companies. But the publication analyzes the consequences of specific actions, the later found leak transaction data from the exchange Mt. Gox (18 million transactions in the CSV file with the ID of the user who bought or sold the currency). Checking these data, the researchers found that as a result of suspicious trading activity the scammers fraudulently took control of more than 600,000 bitcoins, valued at $188 million, and several times raised the price of the cryptocurrency.
In both periods, when carried out suspicious transactions (a characteristic many times increasing trading volume), the USD/BTC grew on average by 4% per day. And in those days when they were not carried out, the course of bitcoin has decreased or showed almost no growth.
The researchers found that the market, which is not so many transactions, it was extremely easy to manipulate. Despite the large capitalization, it is not regulated, and has been a great platform for scammers.
For manipulation in 2013 answered two bot – "Markus" and "Willy", who probably worked from the same source. About the specific scheme you can read in the research – charts, tables, and everything else. But the point is that, for example, Marcus didn't pay for it receives through the exchange of bitcoins. In his account fraudulently credited the cryptocurrency, which is not supported. And no true client Mt. Gox did not receive Fiat that Marcus supposedly "paid" for bitcoins. The bot was active from 14 Feb to 27 September 2013. For 225 days, he had collected 335 898 bitcoin price of about $76 million.
The second bot, Willy, worked with 49 different accounts. They quickly bought bitcoins at exactly $2.5 million each, and never spent. The first account became active on 27 September 2013, after 7 hours and 25 minutes after the deactivation of Marcus. The researchers were able to track the activity Willy until 30 November, when the last account, has spent $2.5 million.
Users who sold Willie bitcoins, apparently, was quite real, instead of duplicated entries, like Marcus, and they knew about the transaction. But economists believe that Willy cheated. First, it is clear that its run by the same people who worked with Marcus. Secondly, ID his account on the exchange were in the range of 658152-832432, while ID normal accounts does not exceed 650 000. Third, there is some evidence that the API of trading in Mt. Gox has gone offline for some periods of Willie. None of the transaction other users for these periods has not been conducted – in addition to shopping Willie. Here researchers consider the case of 7 January 2014, when the API was offline for 90 minutes. At this time, on the stock exchange "mysteriously" left to work one buyer, following the same patterns that accounts Willy: 10-19 bitcoins bought every 6-20 minutes, which helped to support the cryptocurrency.
In sum Willie up to December 2013: bought 132 268 bitcoin price under $112 million. the Researchers believe that the real Fiat currency users, selling coins Willie, not received. They also noted an interesting correlation with the fact that Mt.Gox in bankruptcy in March-April 2014 declared the loss of 650,000 bitcoins – which roughly corresponds to the number of cryptocurrencies purchased fraudulent systems.
In their work, the economists relied, among other things, on an independent study of Reddit users (1, 2), and making the assumption that Mt.Gox and its founder, mark Karpeles, might not set ourselves the task of misappropriation of funds of clients. If you believe that they really lost a specified amount of cryptocurrency, it is likely that the exchange was launched a bot to try to hide this fact and to soften the blow. The rise in the price of bitcoin has attracted new customers and increased the number of transactions. The only condition for the effectiveness of the scheme with Willie was that the people who sold accounts bot cryptocurrency exchange, left his Fiat in Mt. Gox and didn't bring him to a real account. The researchers suggest that Willie and Marcus are not trying to become rich on bitcoin (as evidenced by the fact that they haven't sold), but helped to avoid a collapse of the exchange.
The researchers do not claim that bots are 100% owned by Mt. Gox, their articles are slightly different conclusion. Their goal was to demonstrate how easy it was in 6 times to raise the price of bitcoin, not performing, in fact, no real transactions, and to draw Parallels with what is happening in the markets today.
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