EVE Online keeps on breaking new ground with epic drama. Being a sandbox universe that is currently the closest thing we have to a working, living online world, it shouldn't come as a surprise that people keep finding new ways to bring real world tricks to the mix. This time the drama revolves around insider trading by a Council of Stellar Management (CSM) delegate - a person that was voted by the players to be their representative that gets to meet in person with CCP developers in order to openly discuss the future of the game - under a strict NDA, of course.
Well, someone thought they could make some easy money in-game with information that was disclosed under that NDA. Unfortunately for him, CCP has its own version of SEC with the Internal Affairs department. They monitor in-game activities of those who have access to insider information to prevent insiders from gaining an unfair advantage. End result: Busted, banned and asked to step down from the CSM. Read on for all the juicy details... Internet Spaceship Drama - it is be223atter than all those afternoon soap operas put together!
The statement official from The Council of Stellar Management covers the main points:
Greetings players,
It has come to the attention of our council that one of our councilmen has breached the trust that CCP and the Council has put in him. Acting on his own, he utilized confidential information that CCP shared with us in violation of the Nondisclosure Agreement he signed by attempting to engage insider trading. CCP, who is monitoring us closely, almost instantly discovered his actions and has banned his accounts. The councilmember has since resigned his seat on the council.
The rest of the Council condemns his actions and would like to express our sincere apologies to the players for this breach of trust. We understand that each one of us is held to the utmost standards of loyalty to the players and developers of EVE. We are here to represent and fight for the player base before we even think about our own interests. We cannot and will not tolerate such conduct within our ranks.
With regards,
The Council of Stellar Management
The related EVE Dev Blog includes also statements from the resigned CSM member, Larkonis Trassler and from CCP themselves.
So, What Happened?You see, in EVE there is a massive market system where trillions of in-game currency (ISK) flows every day trading thousands of different items available in the game. If World of Warcraft auction house is your local flea market, compared to that EVE markets are the Wall Street. A sizeable part of that market volume is pure speculation - just like in real world markets - and it is perfectly possible to play the game like a stock market simulator with spaceships.
Knowing before anyone else what the next patch or expansion is going to bring to the game can be extremely valuable information. This and that ship is going to receive a boost, increasing popularity? Buy or manufacture a stockpile and distribute it to major market hubs, to be sold after the patch. Change in the required materials to manufacture some expensive or high volume item? Buy raw materials that are going to go up in demand or invest in producing those raw materials. The only limit is your available capital - and if you have a good reputation and a solid business plan, even loans from investors are available.
Well, Larkonis Trassler heard information that drove him to invest about 5 billion ISK on something in the market with two separate accounts. Obviously something was presented to the CSM during their recent meeting at CCP headquarters in Reykjavik, Iceland that could move the markets. CCP immediately noticed this activity as accounts of all "insiders" are monitored by the Internal Affairs team. IA exists primarily to ensure that CCP employees do not misuse any internal information while playing the game but CSM delegates are also on their list as they may have insider information that is under NDA.
End result? Accounts banned (according to rumors, for 30 days) and a "request" to vacate the CSM seat in very short order. In EVE, insider trading does not pay - at least if you are stupid enough to get caught. In this case it was almost certain as there was no apparent effort to cover up the trading. Greedy people do stupid things, even in EVE Online.
Speculators Say: Neodymium
Neodymium - stable prices, then a sudden volume spike followed by a predictable price spike. As the scandal broke, there is another volume spike at much higher price level as the speculators bite.
This being EVE Online, players are now speculating what Larkonis Trassler invested in. The relatively small sum - 5 billion ISK - rules out many big ticket items and the most widely accepted theory seems to be that CCP is planning to alter the production formulas for some Tech 2 materials or manufacturing components, balancing the uneven demand for "R64" rarity moon minerals. One of those, Neodymium, is worth just a fraction of what Promethium and Dysprosium goes for on the market, even if it is just as rare in the galaxy. This situation stems from the complicated reaction formulas used in Tech 2 Component Production. Any changes to these reactions or to the bill of materials of Tech 2 end products that use Neodymium as a raw material could immediately boost the value of Neodymium and, indirectly, could also reduce the value of Promethium and Dysprosium (unlikely, but you never know).
In the last few days, Neodymium price has shot up - in some regions selling at up to three times what it was before the speculation started. The available stock in Jita at around 1700 ISK per unit was cleaned up in one massive spike - in theory, by Larkonis Trassler doing his insider trading bit - and as soon as the scandal broke, there is another volume spike at a higher level as the speculators hit the market. Today in Jita trading hub the available sell orders sit at 5000 ISK per unit - well above the level where actual trades have been recorded in the past few days - while the buy orders are still at around 1700 ISK. Something definitely happened to Neodymium but at this point it is impossible to say if this is just another case of garden variety market manipulation (not uncommon in EVE). The timing of the initial volume spike is intriguing but until the planned changes are actually made public, it is all speculation. Still, speculators will have a field day and large alliances may take another look at all those Neodymium moons that may have been less interesting than the highly contested Dyspro and Prom moons.
Supercapital Market Also in TurmoilOn a related note, while all this is going on in the moon mineral markets, the EVE supercapital market is also reeling from the recent revelation by CCP during the Penny Arcade Expo that Titans, those 100 billion ISK death star wannabes would get the nerfbat with the Doomsday weapon being changed from fleet-destroying area effect to a single target weapon of some sort. Details are not yet available, but speculation has already driven down the market prices of these massive ships and caused problems to some private corporations that have invested massive piles of loaned ISK into Titan manufacturing - even before the actual details of the changes are public.
Only in EVE Online...
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