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Author Topic: Was flashcrash orchestrated to get around MtGox withdrawal limit?  (Read 1626 times)
shads
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June 20, 2011, 12:41:00 AM
 #1

Hacker steals x thousand BTC.
Hacker tries to withdraw and hits limit $1k USD limit.
Hacker starts dumping BTC to crash price.
Number of bitcoins he can withdraw equivalent to under $1k USD increases dramatically.
Hacker withdraws all remaining BTC.


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imperi
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June 20, 2011, 12:43:11 AM
 #2

It could have been an attempt to do this, yes.
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June 20, 2011, 12:48:17 AM
 #3

aaaaahhhhhhhhhhhhhhhhhhhhhhhhhhh!!!!!
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June 20, 2011, 12:52:59 AM
 #4

obviously

It is pitch black. You are likely to be eaten by a grue.

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lizthegrey
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June 20, 2011, 12:53:29 AM
 #5

Seems like the simplest defense against this would be to use a moving average to base the withdraw limits off.
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June 20, 2011, 12:55:34 AM
 #6

Hacker steals x thousand BTC.
Hacker tries to withdraw and hits limit $1k USD limit.
Hacker starts dumping BTC to crash price.
Number of bitcoins he can withdraw equivalent to under $1k USD increases dramatically.
Hacker withdraws all remaining BTC.



I wish I'd thought of that.  Oh wait, I did. http://forum.bitcoin.org/index.php?topic=19672.msg246725#msg246725  (Not sure that you read that post though.) 

Clearly, that $1,000 withdraw limit for bitcoins should use some sort of moving average price, maybe over 7 days or so.
shads
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June 20, 2011, 01:04:28 AM
 #7

No hadn't read it, woke up about a hour ago and there was a lot of threads to go through...


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June 20, 2011, 01:27:02 AM
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No hadn't read it, woke up about a hour ago and there was a lot of threads to go through...
That's ok, the irony is that while I was writing that someone else posted the moving average idea and I inadvertently repeated it.  I guess these ideas aren't as novel as we think they are.
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June 20, 2011, 01:50:03 AM
 #9

Seems like the simplest defense against this would be to use a moving average to base the withdraw limits off.

That would be the 2nd simplest defense.

The most simple defense would be a circuit-breaker that automatically halts trading in the event of a flash crash or other anomalous event.

I'm absolutely sure that I'm the very first one to suggest that MtGox and the rest implement this.

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