Intrade Sued By Feds Over Alleged Misconduct
Prediction Market Company Falls In Hot Water
Irish online betting firm Intrade, which takes action on a plethora of real-world events, has been sued by the federal government over its prediction market business.
The Commodity Futures Trading Commission has accused the firm of violating its “off-exchange options trading ban” and filing false forms.
The agency stated:
“It is against the law to solicit U.S. persons to buy and sell commodity options, even if they are called ‘prediction’ contracts, unless they are listed for trading and traded on a CFTC-registered exchange or unless legally exempt. The requirement for on-exchange trading is important for a number of reasons, including that it enables the CFTC to police market activity and protect market integrity. Today’s action should make it clear that we will intervene in the ‘prediction’ markets, wherever they may be based, when their U.S. activities violate the Commodity Exchange Act or the CFTC’s regulations.”
Intrade said on its website that the suit doesn’t “signal the end” of its U.S. business.
The CFTC is seeking money. There is no criminal component to the case.
Intrade was recently active during the United States presidential election, taking bets from Americans. Election results have become a fun numbers game for some, as The Wall Street Journal points out, spawning the stardom of New York Times blogger Nate Silver.
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