New China University Research Data Suggests Mt. Gox Exchange Was Manipulating Bitcoin’s Price
New Data Suggest Mt. Gox Exchange Was Used To Manipulate Bitcoin’s Price
According to new data released by experts at the Sun Yat-Sen University in China, found suspicious activity related to the Mt. Gox cryptocurrency exchange. The team behind this investigation and led by Weili Chen found some disturbing patterns on the platform. In order to release these conclusions, they analyzed individual transactions during the bull run experienced by Bitcoin (BTC) in 2014.
The Mt. Gox exchange was the most popular digital currency platform to transact Bitcoin back in 2013 and 2014. The exchange got hacked losing 850,000 Bitcoins. The exchange handled 70% of all Bitcoin transactions at that time.
The experts analyzing the transactions at the exchange discovered that several methods were implemented to manipulate the price of the most popular virtual currency and its market. Sometimes, bitcoins were often sold at very inflated or reduced prices on any given day. It was possible to see some coins being traded at around $45,000 and as low as $0.9. However, the market was not changing a lot.
As per the report, 3 percent of all the transactions processed by the exchange were manipulative. Additionally, these transactions can also be linked to shifts that the market experienced at that time.
On the mater, Chen explained:
“Price manipulation is also a likely purpose. We find that abnormal transactions are greatly correlated with the Bitcoin exchange price.”
Moreover, there were some accounts that were involved in self-trading. Some of these accounts would conduct hundreds of trades between each other moving the market in specific ways. These users could also profit from these movements.
Clearly, there must be a way to stop market manipulation and help the crypto space to evolve into a mature market. One of the best ways to do so is by expanding it and allowing more participants to enter the space. Nevertheless, this is not an easy task and it is something that could take several years.
Now, there are several regulatory agencies around the world that are starting to participate in the market and create new regulations. The legal framework related to cryptocurrencies has to improve with clear and flexible regulations. The main intention is to protect investors against market manipulation and allow companies to work in a regulated space.