Late last year, bitcoin was dominating headlines when its price was soaring from just $13 in January to as high as $1,200 by the end of the year. This was a massive emergence for the peer-to-peer decentralized virtual currency and many had speculated it had to do with the Chinese central bank, Silk Road and United States government hearings.
So was it a genuine rise? Nope, according to a new report published last Sunday that suggests there was price manipulation behind the scenes at the world’s largest bitcoin exchange website, Mt. Gox, which has now gone bankrupt.
Bitcoiners had actually discussed the concept of fraudulent trading activity previously, including the two trading bots, which had been quite prevalent to those who were monitoring live trades and charts throughout the day. The two trading bots had implied that either an individual was attempting to manipulate the market or attain an immense market share.
According to the Willy Report, a substantial majority of the activity transpired in November and that approximately $112 million was used for acquire 270,000 bitcoins. How does this tie back to Mt. Gox?
One fact that many are alluding to is that Markus never paid for his fees on his trades and Willy or Markus did not have a country code attached to their accounts. In addition, the user identification for Markus had actually been modified to 634 in a trading log, a number that is attached to the name “MagicalTux” – dating back to 2011, Mt. Gox CEO Mark Karpeles maintained this online alias.
The report also discovered that Markus and Willy were one of the very few to continue trading during Mt. Gox’s frequent downtimes, a time when most users were stuck with just staring at a suspended trading engine and waiting for announcements.
The price of bitcoin has shot up over the past few days from around $450 to close to $650.