
Intrade Ceases Trading Activity - kevinwmerritt
http://www.intrade.com/v4/home/
======
ghayes
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.

~~~
PeterisP
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.

~~~
jellicle
Well, it's worse than that. No significant company would shut down in this
manner unless they were 100% certain that they did NOT have the money to pay
their debts.

~~~
kevinpet
I don't think that's true. Financial regulations tend to force you to pull the
plug as soon as you can no longer prove that you are solvent. There's a large
range between "cannot prove we do" and "can prove we do not".

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gameshot911
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].

[1][http://www.dailytech.com/Inside+the+MegaHack+of+Bitcoin+the+...](http://www.dailytech.com/Inside+the+MegaHack+of+Bitcoin+the+Full+Story/article21942.htm)

~~~
rvkennedy
They _are_ paying out:

 _Settle all open positions and calculate the settled account value of all
Member accounts immediately._

~~~
jcr
> _At this time and until further notice, it is not possible to make any
> payments to members in accordance with their settled account balance until
> the investigations have concluded._

It seems they are not paying out at this time.

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andrewcooke
is it related to <http://www.cftc.gov/PressRoom/PressReleases/pr6423-12> and
the subsequent collapse in volume
[http://www.ft.com/intl/cms/s/0/e0c9eea0-7ae4-11e2-915b-00144...](http://www.ft.com/intl/cms/s/0/e0c9eea0-7ae4-11e2-915b-00144feabdc0.html)
?

~~~
ChuckMcM
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.

[1]
[http://www.cftc.gov/ConsumerProtection/EducationCenter/Futur...](http://www.cftc.gov/ConsumerProtection/EducationCenter/FuturesMarketBasics/index.htm)
\- "A commodity futures contract is an agreement to buy or sell a particular
commodity at a future date"

~~~
ad
Agree with you on the 49ers example but Intrade had a few contracts that were
closer to the ones regulated by the cftc: the price of oil, gold, the DOW,
etc.

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mattyohe
Intrade shutting down? Huh, what are the odds of that?

~~~
ad
Your joke is even better since one of the Intrade contracts was "intrade will
no longer exist in X years"

~~~
raverbashing
Talk about an intrinsically impossible bet to win!

(at least when betting on the platform itself)

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CurtMonash
They are taking several extraordinary measures:

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.

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niggler
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.

~~~
rishimoko
It's booming in some circles, millions a month probably:

<https://en.bitcoin.it/wiki/Category:Gambling>

sealswithclubs.eu should be mentioned here too.

~~~
gwern
The problem is that currently the closest thing to a prediction market is Bets
of Bitcoin, and they use probably the bizarrest set of rules you have ever had
the misfortune to lay eyes on. So.. not really an alternative at all except
for the most wildly mispriced bets on it (where you can be sure to come out
with a profit regardless of how much the rules screw you).

I see the wiki lists 2 other prediction markets, but they seem to handle
sports only.

~~~
adam
Prediction markets don't necessarily have to be real currency and it's a
misconception that they are only accurate if you're using real money. We have
run a prediction market using fantasy currency for years:
<http://home.inklingmarkets.com>. We also run run private markets for
companies...

~~~
foobarqux
How are you determining the accuracy of your market predictions?

~~~
adam
Here's a blog post we wrote a few years ago about it:
[http://blog.inklingmarkets.com/2008/05/judging-prediction-
ma...](http://blog.inklingmarkets.com/2008/05/judging-prediction-markets-
accuracy.html)

~~~
foobarqux
You don't specify when you are sampling the market. It often wouldn't be
surprising, or useful, that a market correctly predicts an event the day
before it occurs.

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michaelrhansen
Does anyone have any direct experience using them? Curious - not familiar with
prediction markets...

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mathattack
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.

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dmix
What exactly was intrade?

~~~
Bill_Dimm
<http://en.wikipedia.org/wiki/Intrade>

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MichaelApproved
Mobile version is still showing trade prices and other info
<https://m.intrade.com/#home>

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joelthelion
Time for bitcoin-based version :)

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juskrey
Whoa, I thought anyone today already knows that words
"market"+"prediction"="scam"

~~~
jey
Care to elaborate for the ignorant among us?

~~~
hackerboos
Markets are unpredictable.

~~~
jplewicke
Markets are only hard-to-predict in terms of future prices and returns. If all
you want to do is to compare the relative value of two assets, the current
price is a great place to start out. For example, the market is pretty sure
that Exxon Mobil is worth vastly more than Groupon. Likewise, a prediction
market does just fine at telling you stuff like "Romney is much more likely
than Ron Paul to be the Republican candidate."

