LedgerX Founders Placed on Leave Following Clash with CFTC

In the decision, LedgerX's board cited “long-lasting disagreements with the board about the vision and direction" of LedgerX.

The board of directors at Bitcoin derivatives exchange & clearinghouse LedgerX has placed the exchange’s co-founders, Paul and Juthica Chou, on administrative leave “effectively immediately.” The announcement, which came in a press release published this Monday, named Larry E. Thompson as interim Chief Executive Officer and Lead Director of Ledger Holdings.

“Mr. Thompson joins Ledger Holdings following an over 30-year career on Wall Street, where he served in a variety of senior-level roles, including General Counsel and, most recently, Vice Chairman of the Depository Trust & Clearing Corporation (DTCC),” the announcement reads.

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Prior to Monday, Paul and Juthica served as CEO and COO of the exchange, respectively.

The removal of the Chous from their posts could have something to do with a series of explicit Tweets about the CFTC this August

While the press release did not offer a reason for removing the couple from their positions, Bloomberg speculated that the decision might have something to do with a public spat between Paul Chou and the United States’ Commodity Futures Trading Commission (CFTC).

Indeed, Bloomberg reported that in a series of colorful Tweets published this August, Paul Chou accused the CFTC of “breaking the law” after LedgerX allegedly prematurely announced the availability of futures contracts to retail investors.

“Due to miscommunication around a single word between a principal, a PR team member, and one of our most valued publication relationships, it was incorrectly announced that LedgerX is live with trading futures for retail,” Paul Chou wrote in a blog post on the matter.

According to CoinDesk, LedgerX’s application to modify an application for registration with the CFTC currently remains outstanding.

Paul Chou later removed some of his remarks from the Twitter feed, saying that the agency had asked him to censor his comments.

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“Personal animus”

Additionally, CoinDesk obtained two letters revealing that the company’s leadership held a belief that Christopher Giancarlo, former Chairman of the CFTC, held a “personal animus” toward LedgerX because of a blog post written by Paul Chou. Chou confirmed that the letters were accurate at the time they were written.

“[Giancarlo] told him that he was going to make sure our DCO order was revoked within two weeks, due to a blog post written by myself the previous year implying that preferential treatment was being given to larger companies so he could ‘cement his legacy.’ This refers to the ICE / Bakkt approval, which was running into issues that were frustrating the chairman,” one of the letters reads.

”Long-lasting disagreements with the board”

Juthica Chou took to Twitter on Monday to say that no reason had been given for the removal of the Chous from their posts other than “long-lasting disagreements with the board about the vision and direction of the business.”

In an email to CoinDesk, she said that “the board composition is tricky,” and that “there is nobody else on the board that knows computer science, bitcoin and derivatives – which makes these conflicts and disagreements often difficult. Paul and I wish the new management team well.”

Former CFTC Chairman Christopher Giancarlo was succeeded by Heath Tarbert in July. 

LedgerX did not immediately respond to requests for comment. Finance Magnates will add commentary as it is received. 

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