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.
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].<p>[1]<a href="http://www.dailytech.com/Inside+the+MegaHack+of+Bitcoin+the+Full+Story/article21942.htm" rel="nofollow">http://www.dailytech.com/Inside+the+MegaHack+of+Bitcoin+the+...</a>
is it related to <a href="http://www.cftc.gov/PressRoom/PressReleases/pr6423-12" rel="nofollow">http://www.cftc.gov/PressRoom/PressReleases/pr6423-12</a> and the subsequent collapse in volume <a href="http://www.ft.com/intl/cms/s/0/e0c9eea0-7ae4-11e2-915b-00144feabdc0.html" rel="nofollow">http://www.ft.com/intl/cms/s/0/e0c9eea0-7ae4-11e2-915b-00144...</a> ?
They are taking several extraordinary measures:<p>1. Settling all open contracts.
2. Shutting down trading.
3. Not making cash payouts.<p>#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.
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.
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.<p>"Financial Irregularities" is never good, and I can't see this ending well.