Fraudulent trading activity at Mt. Gox

Post by krapp » Sun, May 25, 2014, 7:32 PM UTC

sillysaurus3 wrote: post #26

CamperBob2 wrote: post #12

Earlier quoted context omitted.

I don't know about "escaping all consequences," unless his idea of "escaping all consequences" is having to watch his back for the rest of his life. Seems like a pretty dumb way to make a few million bucks, IMHO.

It pains me to say this, but "dumb and evil" have been par for bitcoin thus far. The question is, will the situation change? It might. Many modern reliable systems grew out of shaky or illicit foundations. But that's little solace in the meantime.

Post by patio11 » Sun, May 25, 2014, 7:34 PM UTC

panarky wrote: post #29

drcode wrote: post #13

Earlier quoted context omitted.

Yes, this is exactly right, but you should clarify: Step 1: create USD_FAKE out of thin air. Step 2: buy BTC at 1200 USD_FAKE on MtGox. Step 3: sell BTC at 1100 USD_REAL on Bitstamp. Step 4: profit!

Whoever sold you BTC in Step 2 isn't going to accept USD_FAKE for their coins. Doesn't this scam fall apart right there? There's something like $600M missing. Were people really leaving that much fiat on account at Gox?

Post by spacefight » Sun, May 25, 2014, 8:14 PM UTC

Post by sillysaurus3 » Sun, May 25, 2014, 8:39 PM UTC

olalonde wrote: post #37

sillysaurus3 wrote: post #9

The reason I'm inclined to believe this report's implications about Karpeles is because I spent a long time in Mt. Gox's IRC support channel talking with support reps, and they were paid to lie. They didn't know they were being paid to lie, but they were instructed by management to say "don't worry, all user coins are safe" right up until the day the Mt. Gox crisis report was leaked. They could have said "we are inve…

I agree with pretty much everything you said but is it true that regulations would have prevented someone like Karpeles from doing the same with say, gold? What regulations prevent this? I'm asking genuinely because I have no idea what regulations exist in that world and I keep hearing that argument from smart people so I guess it's probably true.

Post by tempestn » Sun, May 25, 2014, 8:54 PM UTC

deckar01 wrote: post #25

jabagawee wrote: post #19

Earlier quoted context omitted.

Assuming "Joe" represents the entire userbase of Mt. Gox, which deposited its own money into the system: Start : (Markus: $0) (Joe: 1BTC, $200) Step 1: (Markus: $1200 ) (Joe: 1BTC, $200) Step 2: (Markus: 1BTC) (Joe: $200 + 1200 ) Step 3: (Markus: $200) (Joe: 1BTC, $1200 ) Assuming Markus withdraws fiat before Joe does, Mt. Gox only had $200 in real money and $1200 in fake make-believe numbers, so Joe is left unable t…

But it seems like if they were pumping the price up, then a lot of active traders would be holding fake USD. Mt. Gox can't tell if it is accepting real or fake USD while dumping. I think my first post outling a possible scenario that generate nothing except perceived loss to users once they can't withdraw.