Bitcoin Price Manipulation by Bots Confirmed

According to "Price Manipulation in the Bitcoin Ecosystem" research, Mt Gox bots Willy and Markus "pumped" Bitcoin price from $150 to $1000 in few months
16 January 2018   438

Researchers from the Tel Aviv University and the American University of Tulsa confirmed information that at the infamous Mt Gox stock exchange fraud was conducted with the help of bots Willy and Markus.

The study "Price Manipulation in the Bitcoin Ecosystem" was published in the Journal of Monetary Economics. The authors of the work analyzed the impact on the bitcoin rate of suspicious activity on the Mt.Gox exchange, as a result of which the value of the crypto currency in just two months increased from $ 150 to $ 1000. Then, fraudulent transactions were made with 600,000 for a total of $ 188 million.

Bots Willy and Markus conducted externally real deals, but they didn't "own" bitcoins. Nevertheless, they influenced the price of the crypto currency, stimulating the growth of trading volume on other exchanges.

Even in case of detection and cancellation of fraudulent transactions, the average trading volume on the exchanges increased. Therefore, in days of increased activity of bots, the rate of bitcoin to the dollar increased by an average of 4%. At all other times he, on the contrary, showed a slight decrease.

Since the MtGox exchange charged commission from each transaction, the increase in the volume of trading was also profitable for it. In addition, the researchers indirectly link the Willy bot with the attempts of the owner of MtGox Mark Karpeles to hide the losses from the theft of 650,000 bitcoins.

Willy was first seen in September 2013 and operated until the end of January 2014, buying about 100 BTC per hour at intervals of 5-10 minutes. A month earlier, the bitcoin price reached its first loud maximum. 

Bank of America: Cryptocurrencies Are a Threat

Bank of America (BoA) has admitted to US regulators it can not pretend any longer that cryptocurrencies are not a threat
23 February 2018   137

On February 22, the report was filed with the US Securities and Exchange Commission (SEC). It listed a range of economic, geopolitical, and operational risks that the Charlotte, NC-based bank faces as it heads into the new fiscal year. Crypto adoption was on the list for the first time.

Bank of America (BoA), which recently banned purchasing of crypto with credit cards, stated that this and other similar policies could cost the bank clients.

Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies.

The second largest bank in the U.S. said that adoption of cryptocurrencies could require the bank to make “substantial expenditures” to update its existing services and remain competitive with upstart firms.

The widespread adoption of new technologies, including internet services, cryptocurrencies, and payment systems, could require substantial expenditures to modify or adapt our existing products and services.

According to the Bank of America, cryptocurrencies could limit the institution’s ability to comply with anti-money laundering regulations.

Eventually, this is one of the first public admissions that financial institutions are beginning to worry that mass cryptocurrency adoption could one day become a reality.