Alternative Finances

Report Reveals Evidence Of Bitcoin Ponzi Scheme

bitcoin

Something called Willy Report surfaced on Sunday suggesting that the spike in bitcoin price last year from $200 to $1200 was the result of bots creating fake accounts in an effort to drive up the price. These accounts were never funded with real money.

The report’s anonymous author says that this was a fraudulent attempt on the part of Mt. Gox to profit from the increase in value. The report says that two bots, dubbed Willy and Markus, created fake accounts and purchased bitcoins that were “suspiciously close” in value to the 650,000 bitcoins that Mt. Gox CEO Mark Karpeles claims mysteriously vanished. The report’s author claims that logs leaked from Mt. Gox suggest evidence of a cover-up.

If true, the author’s assertions would affirm what some have characterized as a Ponzi scheme. GigaOm, who has examined the report in detail, says is presents “convincing evidence” that the price of bitcoin was heavily manipulated.

The price of bitcoin has remained in the $500 range for the last several weeks according to the PYMNTS.com Bitcoin Tracker.

For more in depth coverage of bitcoin, please check out PYMNTS Bitcoin Deep Dive series.

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