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Summary:

The report, posted on Sunday as an analysis of public logs, suggests that the systems of failed bitcoin exchange MtGox played host to automated bots that artificially pushed the bitcoin price skywards during 2013.

Coin image adapted from Flickr user Antana
photo: Gigaom Illustration

An authoritative-looking report has appeared that suggests bitcoin‘s meteoric rise late last year — from $200 to $1,200 in one month — may have at least partly been the work of bots, possibly associated with those running the melted-down MtGox online exchange.

The so-called Willy Report emerged on Sunday, claiming to demonstrate fraudulent activity at MtGox. Is it correct? Hard to tell at this point, though it is based on public logs and it does at least have in its favor an absence of accompanying malware (something that blighted the last bundle of alleged MtGox fraud evidence).

According to the report’s anonymous author, automated bots dubbed Willy and Markus spent much of 2013 repeatedly creating new MtGox accounts and using them to “buy” large amounts of bitcoin without actually spending any real money. In total, the two bots probably bought up a volume that’s “suspiciously close” to the 650,000 bitcoins MtGox CEO Mark Karpeles claims the company lost, the report notes.

The report’s author seems to think MtGox itself was behind this activity, based on discrepancies in leaked logs that suggest a cover-up, among other circumstantial details. Interestingly, “Willy seemed to be immune to network downtime,” suggesting the bot was running from MtGox’s own servers. The author characterizes all this as a Ponzi scheme, based as it is on fake liquidity boosting the bitcoin market.

It’s worth remembering how powerful MtGox was in the bitcoin scene last year, handling as it did the bulk of all bitcoin trades. Whether or not Karpeles was indeed behind this, the Willy Report does present convincing-looking evidence of heavy manipulation of the bitcoin price. That price is now around $580, which the report’s author reckons is its realistic “fair” valuation.

UPDATE (28 May): It seems WordPress has taken down the report’s one-post site for violating its terms of service.

  1. How are you going to distinguish the Bitcoin from any other fiat currency which is manipulated by unseen and unsupervised personalities?
    Leslie

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  2. Mark 'Rizzn' Hopkins Monday, May 26, 2014

    Oh, real responsible journalism, guys.

    If you’re going to post about an un-sourced and anonymous report, it’d be a good idea to consult someone who actually knows something about Bitcoin and the community to see if it is in any way credible as an allegation.

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    1. itsdeliveryanddelisio Tuesday, May 27, 2014

      I don’t buy this for a second. I was watching the run to $1380 (approximate on BTCChina) super closely as I got a little burned in the crash from $266 – which was definitely engineered. BTCChina was leadinng the price upwards every time. If anything, Gox was balking at the price surges that BTCChina was making, on huge volume. It wasn’t bull sh*t. This story is. This story serves to keep the price lower for longer, which actually I’m into, as we didn’t buy more at the obvious low because we have large expenditures this week. If we can see $4** again in the next 4 months I’ll be super greatful, but this story is bull shit manipulation in of itself.
      Mt. Gox had a %15 price premium because everyone knew it was rife with fraud.. But BTCChina was often another %10 price premium beyond Gox. So whatever Bull Shit Gox was pulling was irrelevant, and now it is thankfully gone! Rest in a deep grave Gox!

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  3. Willy'sConspiracy Monday, May 26, 2014

    http://www.reddit.com/r/Bitcoin/comments/26is61/the_simplest_explanation_is_usually_the_right_one/

    http://www.reddit.com/r/Bitcoin/comments/26hw0f/it_was_btcchina_not_gox_leading_the_1000usd/

    Two posts which offer a more realistic view on the willy bot, and who lead the price run up. Spoilers, it was BTCChina, not Mt.Gox.

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  4. “An authoritative-looking report”, I’m not sure what that even means. Why bother to do your own research when an unanimous report looks “authoritative”. Cut and paste journalism at its best. Must have really burned the midnight oil with this one.

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  5. Wall Street/Bloomberg Insider is controlled by bots btw

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