min to read

2019-09-29 16:36:59




News

LedgerX accuses the U.S. Commodity Futures Trading Commission of deliberate delay in launching bitcoin futures

LedgerX vs CFTC

min to read

2019-09-29 16:36:59

LedgerX accused the U.S. Commodity Futures Trading Commission (CFTC) of deliberately delaying the consideration of its bid to launch a Clearing Derivative Center (DCO) that would allow it to launch deliverable bitcoin futures trading.

LedgerX accused the U.S. Commodity Futures Trading Commission (CFTC) of deliberately delaying the consideration of its bid to launch a Clearing Derivative Center (DCO) that would allow it to launch deliverable bitcoin futures trading. CoinDesk writes about it with reference to two letters to the Office of the Inspector General at the US Department of Justice.

 

The letters, the authenticity of which LedgerX confirmed, were received in accordance with the Law on the Free Distribution of Information. They claim that the delay was caused by the bias of the CFTC Chairman Christopher Giancarlo, who demonstrated, among other things, favoritism towards the Bakkt and ErisX platforms.

 

"We have reasonable grounds to believe that the unreasonable delay, which is a clear violation of the Commodity Exchange Act, is due to the CFTC chairman's dislike of the blog post written by our CEO," says the first letter of the company’s head, Paul Chou, dated July 3, 2019.

 

LedgerX also claims that in January Christopher Giancarlo called a member of the company's board of directors, saying that he would personally make sure that the DCO registration application was cancelled within two weeks. Thus, says Paul Chou, the chairman of the CFTC has made it clear that he "prefers larger companies." By the latter, the CEO of LedgerX above all means the Bakkt platform, the repeated delays in the launch of which have angered Giancarlo.

 

LedgerX also states that the CFTC, for completely far-fetched reasons, required the company to obtain an insurance certificate and be audited, as if wanting to make sure that its business complied with legal and technical regulations.

 

Juthica Chou, Chief Operating Officer of LedgerX, confirmed this information on Twitter:

 

“Previous chairman wanted to revoke LX license bc Bakkt efforts not moving along. Having no legitimate reason to revoke our license, staff resorted to contacting our independent auditors to tamper with audit to give commission reason to revoke license. Staff admitted and apologized.”

 

 

It is said that the insurance claim caused problems for the CFTC employees themselves, as they realized that similar claims would have to be made to all other potential applicants, i.e. Bakkt and ErisX.

 

"These orders were in no way consistent with the regulatory framework for making impartial decisions and, in our opinion, were completely based on Giancarlo’s personal hostile attitude towards me because of my publication,” said Paul Chou in the letter.

 

This statement is repeated by the Head of LedgerX in another letter dated July 11. It also states that the company's application for DCO registration is considered for about 250 days, while federal law provides for a period of 180 days.

 

Additionally, LedgerX claims to have “incurred significant costs” and to have been forced to part with a number of employees during the proceedings with the CFTC. In addition, citing an unnamed journalist from an "authoritative publication", the company states that "government insiders" passed on the information received from it to major competitors from the private sector. It is assumed that this is ICE, the operator of the Bakkt platform.

 

CFTC spokesman Michael Short said that he could not comment on the allegations, but he stressed that the Commission generally treated all registered entities equally. He also noted that the LedgerX business required “comprehensive study”, and the application review deadlines had been extended due to “multiple changes in the company's licensing strategy.”

All rights reserved © CryptoRivista