Government thinks iPredict is a money laundering risk!

Hamish Rutherford reports:

Prediction website iPredict is to be closed down, with the Government deciding it represents a money laundering risk.

The site, run by Victoria University of Wellington, issued a statement to its website on Thursday and on Twitter.

According to the iPredict statement, Associate Justice Minister Simon Bridges refused to grant it an exemption from the Anti-Money Laundering and Countering Financing of Terrorism Act, declaring that it was a “a legitimate money laundering risk” because of the lack of customer due diligence.

The Government must be joking. Or high.

I really don’t think Islamic State are funding their operations by laundering their money through iPredict by investing $50 on the likely level of interest rates in 2016.

Although iPredict said that most of its transactions were small, three traders hold portfolios on the website worth in excess of $10,000.

One of the site’s higher profile traders, Kiwiblog author David Farrar said the decision was hard to fathom.

“Their turnover is teeny. You could only money launder a few hundred [dollars], maybe a thousand, because their’s just not enough people,” Farrar said, adding that the requirement to give bank accounts or credit card details meant the money should be traceable.

“You could money launder many times larger amounts and much more effectively by going to gaming machines,” Farrar added.

“It just seems like such an overreaction.”

It really is a nuts decision. Most stocks have tiny liquidity. It would be the hardest way to launder money you could think of. Plus unless the terrorists were experts on NZ politics and economics, they’d probably lose most of their money.

So much for being a Government that believes in small Government and proportionate regulation!