- In September 2013, Chapman Tripp applied for exemption from the AML regulations. At page 12 of their submission, paragraphs 52-53, they rightly note that iPredict is tiny and that compliance burdens for the tiny accounts set up at iPredict would dissuade trader entry.
- In October 2013, the Financial Markets Authority worried that because iPredict doesn't verify trader identities, there is risk that a single person could avoid the deposit limits by establishing multiple accounts.
- FMA is there correct: it would be possible for somebody to set up multiple accounts if they were sneaky about it. But the current combined portfolio value of the top 100 traders at iPredict is just under $200,000. Fifty-four accounts have value in excess of $1000. I don't see any hovering under the $10k limit. And while there would have been substantial withdrawals since Simon Bridges's decision, the net worth rankings have been around this kind of order for a while. You need to add up the portfolios of 100 traders to get to about a quarter of the median Auckland house price.
- In December 2014, an anonymous Policy Advisor in the Criminal Law Team at MoJ made a big deal of that the trader earning the highest ROI at iPredict had very very high returns, and that that analyst believed that this raised specific money laundering / terrorism financing risk.
- It's worth noting too, though, that that high ROI trader doesn't show up in the top 100 ranking by net worth. Maybe the trader's just really great and keeps withdrawing, but the trader's account is worth less than $430 currently. Scary.
- MoJ also asks FMA whether iPredict should have to report whenever it becomes aware of any insider trading or "other forms of market manipulation", with requirements to submit STRs.
- In June 2015, FMA said iPredict should be pretty much compliant were they to identify traders so traders couldn't open multiple accounts, and that they should do that rather than be granted an exemption.
- 15 June 2015 MoJ asks iPredict a few clarifying questions, but provides zero signal to iPredict that they might need to identify traders.
- 26 June, iPredict notes that there have been 3 instances of traders having more than one user accounts. Two of these were errors, and the third was deliberate. In the latter case, the account was shut down and the person was prohibited from iPredict.
- iPredict also notes that their systems only do automated withdrawals into NZ bank accounts, and that they have had one instance in the prior 6 months of an account's closure requiring an international bank transfer.
- 12 August 2015 MoJ and FMA note that iPredict "has been designated to the DIA as the FMA has reached a view that it should not be within our supervision". This rather confuses me as iPredict's trading status is an exempt futures exchange. That they came under those regs rather than DIA's gambling purview was of some consternation to DIA when iPredict was set up as I understand things.
- 1 September 2015: they decline the exemption
- Bridges then sends a letter to English's office, among others, notifying them that Predictions Clearing Limited had been denied an exemption. It is interesting that he did not let his Cabinet colleagues know that PCL is the clearinghouse for deposits to iPredict. I wonder whether his Cabinet colleagues were surprised that he wound up killing iPredict. He also sends a letter to iPredict's lawyers, denying the exemption, and suggesting they talk with the FMA about what they need to come into AML/CFT compliance.
- On 26 November, an anonymous boffin notes surprise that iPredict decided to shut down "without discussing this with anyone", noting that "the normal process after a declined application is for the applicant to contact the supervisor (FMA) to confirm what the obligations are under the Act." Perhaps true of for-profit entities. But that this surprised them suggests they never had any real clue about iPredict in the first place.
If iPredict could open new contracts, an interesting one would be:
"Pays $1 if the total value of bureaucracy staff time spent assessing iPredict's AML compliance exceeded the total combined value of all iPredict accounts."I'd be buying at $0.65.