CFTC says LedgerX not yet approved to launch bitcoin futures, CEO Paul Chou threatens to sue

Following recent reports that suggested LedgerX was launching physically-settled bitcoin futures contracts in the U.S. this week, it would appear that the launch did not take place.

In a report, CoinDesk stated that after its initial report on the launch was published, CFTC chief communications officer Michael Short issued a statement via an email:

“LedgerX has not yet been approved by the Commission.”

In June, the CFTC approved the application of LedgerX for designation as a contract market. The company had said at the time that it was the only company to have received both a Swap Execution Facility (SEF) and a Derivatives Clearing Organization (DCO) registration to enable regulated trading of bitcoin derivatives.

LedgerX had also requested the CFTC to amend its order of registration as a DCO, which limits it to clearing swaps, to allow it to clear futures listed on its DCM.

CoinDesk noted that the CFTC has to approve or deny a DCO application within 180 days. LedgerX chief operating and risk officer Juthica Chou suggested that as this stipulated time period has already passed without any objection from the agency, the company perceived that it was clear to go ahead with the launch.

“We submitted the amendment on Nov. 8, 2018, it’s been more than 180 days, we don’t know why that’s the case [that it has not been approved],” Chou said. “We filed on Nov. 8 and we have email correspondences confirming there were no additional items that they needed for the amendment.”

However, a senior CFTC official said that the company needs an explicit approval.

“Every new or amended DCO application needs to be affirmatively approved by the Commission,” the official said. “The absence of a decision does not constitute approval, and entity self-certification is not an option.”

The official went on to state that LedgerX’s DCO application “appears to be in the very final stages of the approval process.”

Following this latest development, LedgerX press representative Ryan Gorman said that he would not be representing the company anymore due to concerns over the events of the last 24 hours.

In addition, CoinDesk also shared a series of tweets from LedgerX CEO Paul Chou in which he said that the CFTC asked the company to censor its tweets. He added, “We did. But never again, this is a disaster to democracy.”

He also said that that he has decided to sue the CFTC for “anti competitive behavior, breach of duty, [and] going against the [regulations].”