Traders to File Lawsuit Against Mt Gox Founder

The well-known exchange was founded in 2007 by Jeb McCaleb (who is now blamed by traders of security problems hiding), and it was sold to Mark Karpenes in 2011
27 June 2019   550

Two former traders of the bankrupt bitcoin exchange Mt. Gox filed a lawsuit against Jed McCaleb, accusing him of fraudulent and deliberate distortion of facts and concealment of information, which partially resulted in the loss of funds during the platform hacking in 2014. It is reported by CoinDesk.

The lawsuit was filed on May 19 in the California Supreme Court on behalf of Joseph Jones and Peter Steinmetz. In it, they claim that security problems on Mt. Gox was present back in January 2011, when, as a result of two hacks, the exchange lost “thousands of a Mt. Gox user’s bitcoin”.

At the same time, according to documents, McCaleb was well aware of what had happened, but he did not report it to the general public, having subsequently sold the stock exchange to Mark Carpeles.

The plaintiffs insist that McCaleb deliberately concealed existing security problems, while continuing to position Mt. Gox as a reliable platform with high liquidity.

In this regard, they, in addition to compensating for their losses, demand that fines be imposed on McCaleb.

The idea that I was somehow to blame for the demise of Mt. Gox, three whole years after I had anything to do with the site, is completely ridiculous. The amount missing when Mark took over was relatively minor and he was fully aware of it. Mark ran the site into the ground. He managed to have 100s of thousands of bitcoins stolen from him without ever even checking his wallet balance. He was clearly totally incompetent and this is why the site went bankrupt not because of anything else. This is why these people lost their money. The suit is frivolous and just a money grab by unscrupulous people.
 

Jed McCaleb

Founder, Mt Gox

According to the documents, Jones was holding 1,900 BTC on the exchange at the time of her bankruptcy, while Steinmetz indicated an amount of 43,000 BTC. Plaintiffs argue that they would not use Mt. Gox, if they had timely learned about the problems of the platform.

Once the largest Bitcoin exchange Mt. Gox crashed in early 2014. This happened after the information appeared about its alleged hacking and theft of 800,000 BTC ($ 480 million at that time). In December last year, Carpeles, during his closing speech at a Tokyo court, called himself innocent of the events that caused the millions of client losses and the company's collapse.

In April, the Tokyo District Court approved the petition of the trustee Mt. Gox Nobuaki Kobayashi to extend the consideration of creditors' applications for compensation and postponed the filing of the final civil rehabilitation plan until October 28

Fake Trading Share to Reach 68%, - FTX Global

This figure, however, is significantly lower than what Bitwise's report and the discrepancy is explained by the difference in methodology
04 July 2019   895

The exchange of derivatives FTX Global and Alameda Research conducted a study that estimated the volumes of fictitious transactions (wash trades), presumably prevailing in many cryptocurrency exchanges.

The report says that 68.6% of trading volumes displayed by CoinMarketCap are fake. This figure, however, is significantly lower than what Bitwise Asset Management announced in March.

The discrepancy between the results in almost 30% of the authors of the new study is explained by the difference in methodology. So, FTX Global is sure that Bitwise used an too strict approach to data analysis, which is why a significant proportion of real trading volumes fell into the category of fake ones.

While our methods are not foolproof, we believe they paint the most accurate picture of the true nature of cryptocurrency trading volume that anyone has made publicly available as of yet.
 

FTX Global Team

The Alameda methodology involves verifying the authenticity of data on trading volumes on various exchanges based on six different parameters, including manual verification of information and comparison of order books.

FTX Global Website
FTX Global Website

In particular, the experts found out that some sites provided data on the volumes of foreign exchanges for their own, with a slight delay in time. Other platforms used more advanced techniques - for example, they introduced large fake volumes only against the background of many smaller orders, thus trying to hide the true state of affairs.

The main purpose of these tactics is to raise the platform higher in the CoinMarketCap rating, creating a false impression of its liquidity. It also sometimes allows for the ability to charge a higher listing fee.