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Intrade discovers a $700k cash shortfall

intrade.com

21–30 of 56 posts

Re: Intrade discovers a $700k cash shortfall

#21
I remember being perplexed looking at the intrade exchange pricing during the last presidential election. I wasn't the only one. Nate Silver and Paul Graham wondered about it too

http://fivethirtyeight.blogs.nytimes.com/2012/10/24/oct-23-t...

https://twitter.com/intent/retweet?tweet_id=2615138971341414...

The bets on Obama not being re-elected seemed way too high. I convinced myself at the time that this must have been due to either personal bias or perhaps a strong republican leaning userbase on Intrade. But now it's starting to seem like it may have been part of some scam.

Re: Intrade discovers a $700k cash shortfall

#23
post #18
post #8

Sounds like the writings been on the wall for a while now. They were fined by the CFTC in late 2012 and had to withdraw from the US market for not being a licensed exchange [1]. Most of their customers were in the US so this was a major blow to their business. I wonder if there's an opportunity here for a Bitcoin based predictions market? [1] http://motherboard.vice.com/blog/how-the-us-killed-intrade

It looks like their demise was due to fraud/embezzlement. Not sure how bitcoin would help here. Also, users of such an exchange would be heavily exposed to the volatility of BTC/$major_currency when making long-term bets. Unless one doesn't care about currency risk, but it's not easy to ignore it unless as long as one's future expenses are still pegged to $major_currency.

Based on past Bitcoin businesses, Bitcoin could help here by making the fraud and embezzlement harder to catch.

Re: Intrade discovers a $700k cash shortfall

#24
post #2

Did you post the URL in the wrong field?

When I put the URL in the URL field it forwarded me to a post a few months ago about Intrade ceasing trading. The latest announcement and that announcement a few months ago were both put on the Intrade homepage so I guess the forum thought I was reposting something.

Re: Intrade discovers a $700k cash shortfall

#27
post #18
post #8

Sounds like the writings been on the wall for a while now. They were fined by the CFTC in late 2012 and had to withdraw from the US market for not being a licensed exchange [1]. Most of their customers were in the US so this was a major blow to their business. I wonder if there's an opportunity here for a Bitcoin based predictions market? [1] http://motherboard.vice.com/blog/how-the-us-killed-intrade

It looks like their demise was due to fraud/embezzlement. Not sure how bitcoin would help here. Also, users of such an exchange would be heavily exposed to the volatility of BTC/$major_currency when making long-term bets. Unless one doesn't care about currency risk, but it's not easy to ignore it unless as long as one's future expenses are still pegged to $major_currency.

The Bitcoin protocol has built into it a sophisticated scripting component which would make it possible to make multiparty contracts (like those on a predictions market) that could not be broken by any means, other than an attack on the underlying Bitcoin protocol. It hasn't yet been fully implemented in any client, but it's there to be used whenever the devs feel comfortable putting it in. This feature has the potential to make Bitcoin fraud/embezzlement much more difficult than it is now.

Re: Intrade discovers a $700k cash shortfall

#28
post #25

Earlier quoted context omitted.

...and for good reason too. Go back and read his comment history before you warn him.

Why do commenters feel the need to point out hellbanning? It seems to defeat the whole purpose.

Sometimes users get hellbanned for no good reason. I was hellbanned for a few days and only noticed because I knew what to look for. I emailed info@ycombinator.com and they said it was an accident, and reinstated me.

I agree with anthonyb though, you should probably make sure they're not actually trolls before pointing it out.

Re: Intrade discovers a $700k cash shortfall

#29
Anyone have a copy of the proposed forbearance agreement for large account holders? It seems pretty brazen to ask people to give the company some slack on repaying deposits when they haven't really come clean on what went wrong. "For legal reasons we are not yet at liberty to document them" isn't good enough explanation; an announcement of specific arrests or civil lawsuits might be.

Re: Intrade discovers a $700k cash shortfall

#30

Anyone have a copy of the proposed forbearance agreement for large account holders? It seems pretty brazen to ask people to give the company some slack on repaying deposits when they haven't really come clean on what went wrong. "For legal reasons we are not yet at liberty to document them" isn't good enough explanation; an announcement of specific arrests or civil lawsuits might be.

Not tipping someone off that they're about to be arrested constitutes "legal reasons."
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