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Fraudulent trading activity at Mt. Gox

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Re: Fraudulent trading activity at Mt. Gox

#91

Post by Aqueous »

michaelt wrote: post #72
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.

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. If I had stolen a few hundred million dollars from mtgox users and disappeared, my policy would be simple: Anyone who tracks me down and puts a gun in my mouth can have ten times their losses refunded, if they tell me how they found me. Twice their losses up front, eight…

If someone has a gun to your head you're not really in a position to set terms. What do you get at the end? A life.

Re: Fraudulent trading activity at Mt. Gox

#92

Post by ok_craig »

boyaka wrote: post #83
waterlesscloud wrote: post #55

Earlier quoted context omitted.

So why did it crash? Why didn't the fraudster just prop up the price?

Bitcoin has been pumped up and crashed 3 times. The fraudulent trading of Mt. Gox was only the most recent crash.

According to the actual post, it was at least the last 2 times.

Re: Fraudulent trading activity at Mt. Gox

#93

Post by pdkl95 »

argumentum wrote: post #62
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 most of what you said but: > Karpeles seems to have a history of lying. He was caught in a lie by his employer in 2004 Everybody "has a history of lying", because everybody lies. One incident of lying to an employer about IM'ing (or using Facebook or HN while at work, which almost every HN user has likely done) does not a future fraud make. Lying is universal - we all do it. Therefore, the wise thing is…

This is what we call "projection". You may lie sometimes, and so you assume other people do as well.

Some of us don't. Personally, I don't have the room in my head for it; there far more important thing to try and remember, and trying to keep track of lies would eat up way to much wetware.

I make no claims as to frequency of non-lying - it be a rare trait. I have met a couple others, though, so "everybody" is incorrect.

Re: Fraudulent trading activity at Mt. Gox

#94

Post by krapp »

boyaka wrote: post #81
sillysaurus3 wrote: post #26

Earlier quoted context omitted.

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.

Because Mt. Gox is totally the foundation of bitcoin rollseyes

Mt Gox is not the foundation of bitcoin. Bear-Stearns and Lehman Brothers are not the foundation of the dollar. Yet some bitcoiners seem quite happy to ignore the former, while insisting upon the inevitability of the latter. If the crime and corruption of regulated systems are a valid argument for cryptocurrencies, then surely Mt Gox is a valid argument against them.

Re: Fraudulent trading activity at Mt. Gox

#95

Post by oznathan »

I don't think the bot is responsible for either bubble.

But, if it was, the bitcoin world owes everything to Mark Karpeles. Because of the price surges it got all the media attention, VC investments, hundreds of companies popping up, millions of users...

Re: Fraudulent trading activity at Mt. Gox

#96

Post by sillysaurus3 »

oznathan wrote: post #95

I don't think the bot is responsible for either bubble. But, if it was, the bitcoin world owes everything to Mark Karpeles. Because of the price surges it got all the media attention, VC investments, hundreds of companies popping up, millions of users...

... and hundreds of thousands of people losing everything they had in Mt. Gox (at best) and straight into Karpeles' pocket (at worst).

Are you sure we owe him?

Re: Fraudulent trading activity at Mt. Gox

#97

Post by judk »

nroets wrote: post #58
Tycho wrote: post #51

How does this fake_usd demand driving up the price of Bitcoin tenfold compare with the New York Fed's ex nihilo asset purchase program?

(I assume you're referring to QE1, QE2 and QE3) It's say a supermarket advertises bread for $1. Anyone who reads the ad, will consciously or unconsciously believe that the dollar has value. Now multiply this effect by all the similar advertising over many years and you'll see that the dollar is the strongest brand ever. When the financial crisis hit in 2008, the public starting saving and they choose the most stable…

And to close the point, the US Government doesn't go bankrupt, because they never actually get called out to show their accounts of (fake) money. Their new money is as good as the rest, meaning that their actions dilute all dollars equally, instead of only wiping out accountholders at one institution.

Re: Fraudulent trading activity at Mt. Gox

#98

Post by judk »

nl wrote: post #87
christianbryant wrote: post #63

Exactly the reason why technology must be open and transparent. Sadly, decision makers that define economic policy and allow organizations to reach this level of misuse (or misconduct) know little to nothing about what these technologies are capable of, or to what extent they can be compromised and manipulated. Kudos to the tech makers and users who do understand for maintaining a watchful eye and not hesitating to r…

Isn't this almost exactly the opposite of the problem here? What appears to have happened here is something completely unrelated to the technology. The same thing could have happened in any financial exchange. There were two difference that made it possible here: 1) the investors may have been technical experts but were financially naive and dramatically underpriced the risk, and 2) the market was completely unregula…

MtGox customers surely ate not technical experts. Technical experts would hold their own wallet instead of handing it over to some guy in Japan who was publicly known to be unable of running a secure website, let alone a financial exchange.

Re: Fraudulent trading activity at Mt. Gox

#99

Post by sirdogealot »

gone35 wrote: post #64
olalonde wrote: post #37

Earlier quoted context omitted.

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.

Sure it would. He might have still been able to commit fraud to some extent the way, say, Madoff did ( eg by thoroughly falsifying his trail and meticulously avoiding any alarm-raising cash/securities move); but definitely he would not have been able to corner the market with phantom bot accounts with no transaction fees with such ease. For instance, if the exchange had been regulated as a Designated Contract Maker (…

>phantom bot accounts with no transaction fees with such ease.

Never mind the criminally dumb omission of the transaction fees. Gox could have bought a valid trading identity on one of the various websites that sell them, and included the fees (which end up in their pocket anyways) in the transaction.

Re: Fraudulent trading activity at Mt. Gox

#100

Post by nl »

judk wrote: post #98
nl wrote: post #87

Earlier quoted context omitted.

Isn't this almost exactly the opposite of the problem here? What appears to have happened here is something completely unrelated to the technology. The same thing could have happened in any financial exchange. There were two difference that made it possible here: 1) the investors may have been technical experts but were financially naive and dramatically underpriced the risk, and 2) the market was completely unregula…

MtGox customers surely ate not technical experts. Technical experts would hold their own wallet instead of handing it over to some guy in Japan who was publicly known to be unable of running a secure website, let alone a financial exchange.

I think the "unable of running a secure website, let alone a financial exchange" part of your comment goes to the "dramatically underpriced the risk" part of my comment.

Denying their technical expertise is more interesting. I've heard that theory often, and yet there are plenty of people I thought were technically proficient who lost money.

Indeed, I have some (small) amount of money in another Bitcoin exchange - it is convenient.

Perhaps the level of technical expertise of these users is roughly that of an average HN reader: ie, somewhat higher than the general population.

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