On October 14, 2013, Bitcoin’s value hit $150 after weeks of vacillating between $100 and $120. It seemed like an unusual little spike, but nothing out of the ordinary.

Little did speculators realize it would never again sink down to such values after that Monday.

In the following month or so, the cryptocurrency’s price experienced spectacular growth, hitting the $1,000 milestone on November 25.

This may look like a tiny blip on the radar now, but back then it felt as dramatic as Bitcoin’s climb in 2017.

A joint analysis performed by Tel Aviv University and the University of Tulsa looked back at that period, revealing that the cryptocurrency may have been manipulated to achieve that value.

The paper, titled “Price Manipulation in the Bitcoin Ecosystem,” examines transactions carried out on the famous exchange Mt. Gox from February to November 2013.

As the researchers explain, there were inconsistencies in the exchange’s records that might suggest a certain amount of Bitcoin may have been purchased outside of its real market value to give the appearance of a higher-than-normal trading volume.

“During initial data exploration we found a group of users with attributes that differed from the rest of the users in the dataset. In particular, for these users every transaction had ‘??’ as an entry for the user country and user state fields… One account containing the abnormal location values stood out when compared to the others because this account bought and sold Bitcoins, whereas the others only bought. We adhere to the naming convention in the blogs and refer to the first account as Markus,” the researchers write.

The blogs they are referring to comprise a series of older cryptocurrency fan blogs that examined the Mt. Gox data leaked in the hacking incident of 2014.

“Upon closer inspection, Markus’s trades raised many red flags. He never paid transaction fees and reportedly paid seemingly random prices for Bitcoins. Most curious of all, we identified many duplicate transactions in which the amount paid was changed from an implausibly random price to one that was consistent with other trades that day. In the end, Markus likely did not pay for the Bitcoins he acquired; rather, his account was fraudulently credited with claimed Bitcoins that almost certainly were not backed by real coins,” the researchers continue.

They add that “Markus” bought 335,898 Bitcoins, which would have been worth about $76 million at the time.

The fraud becomes more troubling when we look into the researchers’ analysis of the “Willy” bots, which were parties in automatic transactions that were passed off as legitimate activity.

“Unlike Markus, Willy did not use a single ID; instead, it was a collection of 49 separate accounts that each rapidly bought exactly 2.5 million USD in sequential order and never sold the acquired Bitcoin… Recently, in a trial in Japan, the Former Mt. Gox CEO Mark Karpeles confirmed that the exchange itself operated these accounts and that the trades were issued automatically,” the report notes.

The research team goes on to add that Willy was active on September 27, 2013, less than eight hours after Markus was deactivated. They were able to track Willy accounts trading right up until the end of November.

Although these findings may lend credibility to many who have associated Bitcoin with criminality, we cannot emphasize enough the fact that this took place during a period when Bitcoin’s trading volume was low enough to be easily manipulated by a single actor.

If we wanted to reproduce this kind of manipulation now, we would need to mount a conspiracy involving a significant number of the world’s exchanges.

However, it is important to look at the fragility of small and non-established cryptocurrencies so that we can understand the risks behind pump & dump schemes.