To its proponents, the cryptocurrency Bitcoin offers the potential to disrupt payment systems and traditional currencies. It has also been subject to security breaches and wild price fluctu-ations. In this talk, I will identify and analyze the impact of suspicious trading activity on the Mt. Gox Bitcoin currency exchange, in which approximately 600,000 bitcoins (BTC) valued at $188 million were fraudulently acquired. During both periods, the USD-BTC exchange rate rose by an average of four percent on days when suspicious trades took place, compared to a slight decline on days without suspicious activity. Based on rigorous analysis with extensive robustness checks, I demonstrate that the suspicious trading activity likely caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months. Finally, I will discuss the potential for price manipulation in cryptocurrencies today, as well as policy options to mitigate these risks.
Tyler Moore is an Assistant Professor of Computer Science at the University of Tulsa, where he holds the Tandy Chair of Cyber Security and Information Assurance. His research focuses on security economics, cybercrime measurement, and cybersecurity policy. Dr. Moore serves as Director of StopBadware, a non-profit anti-malware organization. He is a founding Editor in Chief of the Journal of Cybersecurity, a new interdisciplinary journal published by Oxford University Press. He was a 2016-17 New America Cybersecurity Fellow. Prior to join-ing Tulsa University, he was a postdoctoral fellow at the Center for Research on Computation and Society (CRCS) at Harvard University, the Hess Visiting Assistant Professor of Computer Science at Wellesley College, and an assistant professor at Southern Methodist University. A British Marshall Scholar, Prof. Moore completed his PhD at the University of Cambridge, while he holds BS degrees in Computer Science and Applied Mathematics from the University of Tulsa.