The title here is misleading. They are "ceasing trading activity" ... "as we do all we can to resume operations as promptly as possible." The statement alludes to "financial irregularities" which are being investigated.
Well, "financial irregularities which in accordance with Irish law oblige the directors ..." is legalese that, in essence, means something like "we've caught someone [stealing from the cookie jar / lying about losses] on a so large scale that the board is not sure if the company will be able to pay the money it owes to everyone".
There are just a few cases where the law obliges directors to do something; I'm not an expert in Irish legislation, but most likely they are clearly enumerated in a single law.
The money is gone. Either fraud (founders were skimming off the top all along), or they got hacked (and the 'hack' could have been an inside job as well). That's why they're not paying out - they don't have enough funds available. Same thing happened previously to one of the largest bitcoin exchanges[1].
Or it could be the most likely explanation: the existing US federal investigation of Intrade is moving to the next phase, a grand jury has issued a sealed indictment of Intrade staff, and their assets have been frozen.
After they got shut out of the US market in November 2012, they lost a lot of customers overnight and had to pay all of them out in full. It might be something like the Madoff case, where he might still be free, if the financial crisis hadn't hit and made his customers cash out.
Probably. Interesting line the CFTC is taking though, since it is only able to regulate US citizen's use of commodity markets and predictions are a commodity by the definition of the law as far as I can tell [1]. The 'fiction' here is that you're actually going to by pork bellies or soy beans or oranges, when really your just buying and trading the 'right' to buy these commodities at a particular price. So "The 49'ers will win the super bowl" is a "bet" but it isn't really a commodity.
So while I could buy intrade as an unlicensed betting parlor I don't see them as a commodities trader. That said, folks don't like it when you make money that they think they should be making.
There was speculation, especially in the run-up to the 2012 Presidential election, that some of the pricing differences between Intrade and Betfair were due to the higher risk associated with trading on Intrade. So it is thought that market prices on Intrade may in fact have taken the likelihood of this event into account.
1. Settling all open contracts.
2. Shutting down trading.
3. Not making cash payouts.
#3 would be the end result of any of various sorts of problems. #1/#2, however, suggest there were problems with the prediction markets themselves, rather than -- for example -- straight embezzlement from the company's bank accounts.
Slightly OT: what's the current status of online gambling? There were talks of nevada and new jersey loosening restrictions, but most of those were reported by financial analysts and not by the technical community.
Wow - this is pretty heavy. It's unfortunate, as I liked it as a view of market sentiment. It's one thing to pontificate, another to vote with dollars.
"Financial Irregularities" is never good, and I can't see this ending well.
[+] [-] ghayes|13 years ago|reply
[+] [-] PeterisP|13 years ago|reply
There are just a few cases where the law obliges directors to do something; I'm not an expert in Irish legislation, but most likely they are clearly enumerated in a single law.
[+] [-] unreal37|13 years ago|reply
[+] [-] joonix|13 years ago|reply
[+] [-] gameshot911|13 years ago|reply
[1]http://www.dailytech.com/Inside+the+MegaHack+of+Bitcoin+the+...
[+] [-] il|13 years ago|reply
[+] [-] vellum|13 years ago|reply
[+] [-] unknown|13 years ago|reply
[deleted]
[+] [-] abrkn|13 years ago|reply
Are they paying or not?
[+] [-] ig1|13 years ago|reply
[+] [-] rvkennedy|13 years ago|reply
Settle all open positions and calculate the settled account value of all Member accounts immediately.
[+] [-] andrewcooke|13 years ago|reply
[+] [-] ChuckMcM|13 years ago|reply
So while I could buy intrade as an unlicensed betting parlor I don't see them as a commodities trader. That said, folks don't like it when you make money that they think they should be making.
[1] http://www.cftc.gov/ConsumerProtection/EducationCenter/Futur... - "A commodity futures contract is an agreement to buy or sell a particular commodity at a future date"
[+] [-] apineda|13 years ago|reply
[+] [-] mattyohe|13 years ago|reply
[+] [-] ad|13 years ago|reply
[+] [-] bo1024|13 years ago|reply
[+] [-] CurtMonash|13 years ago|reply
1. Settling all open contracts. 2. Shutting down trading. 3. Not making cash payouts.
#3 would be the end result of any of various sorts of problems. #1/#2, however, suggest there were problems with the prediction markets themselves, rather than -- for example -- straight embezzlement from the company's bank accounts.
[+] [-] niggler|13 years ago|reply
[+] [-] culturestate|13 years ago|reply
1. http://www.cbsnews.com/8301-250_162-57570664/nevada-legalize...
2. http://www.nj.com/politics/index.ssf/2013/03/nj_moving_at_di...
[+] [-] rishimoko|13 years ago|reply
https://en.bitcoin.it/wiki/Category:Gambling
sealswithclubs.eu should be mentioned here too.
[+] [-] michaelrhansen|13 years ago|reply
[+] [-] mathattack|13 years ago|reply
"Financial Irregularities" is never good, and I can't see this ending well.
[+] [-] dmix|13 years ago|reply
[+] [-] Bill_Dimm|13 years ago|reply
[+] [-] trotsky|13 years ago|reply
[+] [-] yekko|13 years ago|reply
[+] [-] MichaelApproved|13 years ago|reply
[+] [-] joelthelion|13 years ago|reply
[+] [-] juskrey|13 years ago|reply
[+] [-] Zigurd|13 years ago|reply
While Intrade might have been mismanaged, there is nothing fundamentally dishonest about a prediction market.
[+] [-] kybernetikos|13 years ago|reply
[+] [-] jey|13 years ago|reply