According to TheBlock, the chief executives of the US-led LedgerX accuse the Commodities Futures Trading Commission (CFTC) of favoring Bakkt to their advantage. Paul Chou, the company’s CEO, released a series on Friday tweets, claiming that the CFTC broke promises and made back-to-back deals with Bakkt and ErisX.
The drama on Twitter appears as an embarrassment of an embarrassing roll-back of LedgerX’s crypto derivative platform in August. At that time, LedgerX had the impression that CFTC gave the company the necessary authorization to launch the physically settled futures contracts.
Lack of communication
However, after the launch of the Omni platform, the CFTC publicly stated that LedgerX did not obtain all the approvals required for trading futures options and contracts.
LedgerX claims that former CFTC chairman Christopher Giancarlo is behind approval delays.
“Our request to the Commission and the related discussions lasted for more than 180 days without approval or refusal”,
it is noted in a letter sent by LedgerX to the commission in July.
“We have strong reason to believe that this unjustified delay is a clear violation of the Commodity Exchange Act and is related to the CFTC president’s animosity towards a blog post written by our CEO.”
Commodities Futures Trading Commission favors existing players
Unnamed sources said that, in general, the CFTC favors the existing players in the traditional financial market over newcomers like LedgerX. Bakkt and ErisX thus had substantial advantages and obtained approvals faster.
CFTC spokesman Michael Short, however, said the agency “handles all requests equally” and that the delay in approving LedgerX was due to the exchange making repeated changes to the licensing documents.
There are many ways to approve a new futures contract. Bakkt, for example, launched its own New York state-run trust, while ErisX and LedgerX decided to launch a market through a DCO and DCM license.
In its approval process, LedgerX says the CFTC has requested the company to purchase a SOC 1 audit, a type of security audit that has been performed by several companies, including BitGo.
Juthica Chou, Chou’s wife, said the agency intervened in the SOC1 lawsuit after revoking the DCO license granted to LedgerX.
“The previous president wanted to revoke our LX license, because Bakkt was late in filing documents. As they did not have a legitimate reason to revoke our license, the CFTC staff contacted our independent auditors to alter the audit and thus have reasons to revoke the license ”,
she wrote.
Meanwhile, LedgerX CEO Chou was sacked from the CFTC’s technology commission advisor position for “inappropriate behavior”.
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