"We never bet against our clients." - The most repeated sentence regarding Bitcoinica. There are people who long and people short. If these positions were open

"We never bet against our clients." - The most repeated sentence regarding Bitcoinica. There are people who long and people short. If these positions were opened at the same time and price, they can be canceled out directly. Otherwise, we will trade at other exchanges to hedge. We are partly responsible for the crash yesterday because we dumped more than 800 BTC into the market when the order book was quite thin due to large amount of short sell orders. The spreads were large due to lack of liquidity. We have roughly the same financial status regardless of our clients' profitability. We may lose some on guaranteed liquidity, but the loss will be compensated by the subsequent (small) increase in spread.