LedgerX, US-regulated bitcoin derivatives exchange and clearinghouse, is a victim of improper treating and hopefully a blog post posted by the CEO of the exchange is responsible for this. A doubt is working that is the bias of ex-CFTC chairman, namely J. Christopher Giancarlo, against the company.
The chairman intentionally delayed in issuing approval of an amended Derivatives Clearing Organization registration which strongly breaches the Commodity Exchange Act. CEO of the exchange confirmed that the letters, two letters, are accurate and comprised of just some of the messages dispatched to the agency.
The talks of threatening of former Chair Giancarlo were mentioned in the first letter. The chairman was going to rescind the DCO order of the exchange due to the blog post that was written emphasizing biased treatment was being provided to larger companies so he might ‘cement his legacy’.
It’s a longstanding conflict. On the other hand CFTC spokesperson Michael Short denied all the allegations.
There were two obligations from CFTC to LedgerX to acquire insurance and SOC 1 Type 2 audit to justify legacy. But LedgerX thought it to be bogus. The letter carried an allegation of temperament by CFTC staffer with LedgerX’s audit which was disregarded by CFTC.
Juthica Chou, COO of LedgerX, tweeted that finding no legitimate reason to rescind their license, staff reported to contracting their independent auditors to temper with audit to give commission reason to countermand license.
The agency was also adopting issues on insurance out of regulatory framework designed to neutrally judge an application’s merit and reputation. And this all happened because of the animosity between Giancarlo and the exchange CEO regarding his post.
The second letter repeated the claim providing 180 days to CFTC to approve or deny an application under federal law but what would be the reaction wasn’t mentioned.
Allowance to ICE
The SDR requirements of CFTC require LedgerX to report to the ICE Trade Vault which said previous year to launch a competing product to LedgerX in the form of Bakkt. An employee of ICE confirmed that they were watching the contract of exchange with great interest.
The ICE was ordered to delay support for the exchange’s SDR reporting so that the exchange could not commence trading. Thinking it as anticompetitive, the exchange filed a complaint about this anticompetitive aspect but no answer was found.
Then it got confirmed by a source that certain entities were being treated by the Chairman’s office.
Because of this issue LedgerX needed to suffer a lot and lost several employees. A journalist of a reputed institutions said that ‘’government insiders’’ had been sharing information regarding the plans of the company with large private sector competitors.
Bakkt goes direct
Fact is that the company has not yet been sanctioned by the commission. LedgerX bear Bakkt, first U.S. regulated company of ICE, to launching physically delivered bitcoin future contracts at the end of July. It is the first physically delivered crypto-currency future contracts ever traded on LedgerX.
It is thought that CFTC were going to make them delete the tweet for which all these done. Paul Chou was fired from the CFTC Technology Advisory Committee. Why they did it he was pretty sure of this. LedgerX is the only member that does custody right which came as an issue.
But from a source it got heard that the removal was a solid decision by the commission.