You can't force people to fill bids and asks at pre-freeze prices, as that would just lead to participants being horribly arbitraged against (and even if Mt. Go

You can't force people to fill bids and asks at pre-freeze prices, as that would just lead to participants being horribly arbitraged against (and even if Mt. Gox were the only way of trading Btc for USD, it would still be a terrible idea); so the only other option is to suspend trading. Well, now what? Btc will still be traded; the market price will still move; but you won't be able to see it happening on Mt. Gox anymore. The effect would be to harm the liquidity of holders of Mt. Gox accounts, not to reduce volatility; and in fact, by reducing volume, volatility would likely increase. The site would lose its business in a few days or hours. My theory of what could rapidly reduce volatility in Bitcoin: liquid markets in futures and vanilla options. It's an easy way of generating more volume. It provides price stability to businesses accepting Bitcoin as payment. Empirical evidence exists that the more options purchased by hedgers, the less volatility exists in the underlying: http://www.terry.uga.edu/finance/docs/pearson.pdf http://www.terry.uga.edu/finance/docs/pearson.pdf.