LedgerX: Futures Trading Commission opts for Bakkt due to personal bias

LedgerX cryptocurrency exchange claims that former Chairman of the U.S. Commodity Futures Trading Commission (CFTC) Christopher Giancarlo prevented the consideration of her application for opening a derivatives clearing center (DCO) due to personal bias against the company’s CEO Paul Chow.

Two letters were published (their authenticity was confirmed in LedgerX) to the Office of the Inspector General at the US Department of Justice. The first letter, dated July 3, reads:

We have good reason to believe that this unreasonable delay, which is a clear violation of the law of the Mercantile Exchange Act, because it is related to the hostility of the [CFTC] chairman to a blog post written by our CEO.

Chow confirmed that letters are just some of the messages the company sent to CFTC. LedgerX claims that in January Giancarlo phoned a member of the board of directors: “[Giancarlo] told him that he was going to make sure that the application for DCO would be canceled within two weeks due to a blog post written last year. He hinted that he preferred to give preference to larger companies. ”

Apparently, by large companies, the CFTC chairman meant the Bakkt cryptocurrency platform, which encountered unexpected problems, which caused Giancarlo’s discontent. The letter, however, does not indicate which blog post caused such a rejection by the chairman.

The company also claims that LedgerX was asked to purchase insurance and conduct an audit. In addition, the company said that one of the CFTC employees was trying to intervene in the audit of LedgerX. The requirement to purchase insurance put CFTC employees in an uncomfortable position, as they would have to put forward similar requirements to everyone who placed their applications (including Bakkt).

In a second letter dated July 11, the company notes that its application has been pending for almost 250 days – currently more than 300. According to the report, CFTC now has 180 days to approve or reject the application in accordance with federal laws.

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