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LedgerX Claims the CFTC Blocked Them Due to ‘Favoritism’
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LedgerX announced in June that it had secured approval from the CFTC to be the first futures exchange backed by real Bitcoin (BTC). Since then, CFTC has rejected this announced which has caused significant controversy.
Is the CFTC favoriting Bakkt over LedgerX? That seems to be the claim that the company is making in a controversy that reached new proportions this past weekend.
Executives at LedgerX are claiming that the Commodities Futures Trading Commission (CFTC) is acting unfairly and exhibited favoritism toward its rival, Bakkt. The CEO of the firm, Paul Chou, told reporters that the CFTC not only broke promises, but also engaged in shady ‘backroom deals.’
All of this comes after an embarrassing saga for LedgerX, which started with excitement and quickly descended to outrage. The firm claims that the bias of former CFTC chairman Christopher Giancarlo is ultimately to blame for the delays.
“We have strong reason to believe that this unreasonable delay is in clear violation of the Commodity Exchange Act is related to the Chairman’s animus towards a blog post written by our CEO.”
It’s still unclear why the CFTC would favor Bakkt over LedgerX. The removal of LedgerX from the running was the result of a “unanimous decision by the Commission.” When LedgerX first announced its bitcoin futures market, the CFTC claims that the exchange only had a license to operate a swaps market.
It seems clear that, due to the controversy, LedgerX will have an even hard time getting an approval. However, they likely plan to take this issue to court.
Do you agree that the CFTC is possibly playing favorites? Let us know your thoughts in the comments below.
Image courtesy of Financial Times.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
