In June, LedgerX proudly announced to the entire crypto-world that it had become the first exchange approved by the Commodity Futures Trading Commission (CFTC) to run a futures market with real Bitcoin. It has now emerged that this announcement was premature, with the CFTC clarifying that the company was not approved.
There has been much confusion recently after it has been revealed that LedgerX’s apparent approval by the CFTC has all been a farce. The U.S-regulated Bitcoin derivatives exchange and clearinghouse hoped to be the first platform to host a futures market settled in real Bitcoin. The CFTC clarified recently that the exchange “has not yet been approved by the Commission.”
The consequence of the CFTC’s changed position has caused much anger, even within the LedgerX team. For example, it has come out that the LedgerX press representative Ryan Gorman has left the company over the issue. The company’s CEO, Paul Chou, has also lashed out at the CFTC in a series of expletive-ridden tweets, claiming that he is prepared to sue the agency for “anti-competitive behavior and breach of duty.”
According to Michael Short, a representative at the CFTC, “LedgerX requested that the CFTC amend their order of registration as a DCO to also include clearing futures listed on its DCM… that process has not yet been completed.” So far, the CFTC has not responded to Chou’s tweetstorm.
It seems that LedgerX was too happy to make the announcement in June, ignoring still the paperwork that had to be completed with the CFTC. What has followed was a PR blunder, and it’s unclear when the CFTC will go live. Initially, many crypto-analysts were surprised that the small startup was able to gain approval before Intercontinental Exchange’s Bakkt and TD Ameritrade-backed ErisX—it seems that it was, indeed, too good to be true.
LedgerX already has a swap execution facility set up for institutional traders. With $10M backed up in assets, it already is a major player within the United States. However, it seems that the company will have to wait further for complete CFTC approvals. Moreover, the recent outburst has led many to doubt LedgerX, and we may even see a case brought forward by the company against the CFTC if things escalate.
Do you believe LedgerX’s blunder will have a negative impact on Bitcoin? Or is this just a minor, but unfortunate, blunder? Let us know your thoughts below.