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February 14, 2014, 11:32:26 AM |
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Mt Gox, is a rehash on the old market maker confidence trick that happens all the time.
Step 1: Offer to buy something at a higher than average price, pay out quickly, build confidence Step 2: Slow down the payment for the thing being brought, sell some of the things to pay sellers and pay off original stake Step 3: Claim xyz has happened, gone to hospital, cat's died, tech failure, etc and that you cannot payback now but will when the problem is fixed, out of hospital, etc allowing time for even more funds to flow in and for funds to be sent elsewhere. Step 4: Bring new staff on board to run the outfit. Step 5: Offer the things for sale at a lower price than market but delay sending things claiming again a re-occurrence of 'xyz', plus new staff are untrained, illness returned, new cat has kill the dog, etc allowing time for even more funds to flow in and for funds to be sent elsewhere. Step 6: Put distance between yourself, the sellers, buyers, authorities and let new staff deal with the problems.[/li][/list]
The same trick has been played many, many times and until Step 6 occurs, the confidence trickster can just claim incompetence, lack of business knowledge, pet shop owner, etc and get away with it.
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