More on iPredict

NBR report:

The website says it applied for an exemption from the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT) but Associate Justice Minister Simon Bridges denied it on the basis that was “a legitimate money laundering risk.”

Mr Bridges says the decision was taken on the recommendation of the AML/CFT National Coordination Committee, which is established to consider the policy.

He added the main reason for denial was that iPredict does not identify its customers, “which creates an opportunity to use the iPredict market to launder illicit funds.

And the chance of this? People could use a fruit market to launder funds.

“Deposit restrictions apply but these can be circumvented by setting up multiple user accounts as the customers’ identities are not verified,” the minister (who iPredict says only has a 4% chance to become the next prime minister) says.

Mr Bridges says he recommended iPredict discuss with the FMA how to meet its obligations under the AML/CFT Act such as requiring users to provide their full name, date of birth and address.

And also scans of passports to verify?

All that is needed is for iPredict to agree with the Government that if they detect suspicious activity which could be money laundering, they’ll report it. So if there was a pattern of deposits and withdrawals without any stocks purchased, that would ring a warning bell.

But requiring them to verify the identify of every customer is over the top.

“We are an academic not-for-profit organisation and our agreement with the FMA dictates we place caps on transactions. For example, over the past seven years, we have handled a total of 3,782 withdrawals, with an average trader net worth of $41. Our withdrawal process is lengthy and we are a low risk of money laundering,” iPredict says.

Yes an average net worth of $41. That will fund a lot of terrorism!

The prediction tool says the cost of compliance is too high so it will wind up operations.

A great example of regulatory overkill.

Comments (26)

Login to comment or vote