LedgerX, the Bitcoin exchange and clearing house, has put their co-founders on administrative leave for an undefined period of time over potential “long-lasting disagreements” in the direction of the company. LedgerX was at the center of a PR debacle back in July when it launched Omni, its physically-settled Bitcoin futures, only to have their plans quashed by the Commodity Futures Trading Commission (CFTC) who claimed that Omni wasn’t cleared for such a process.
Did CFTC Battle Seal Their Fate?
LedgerX was founded by Paul and Juthica Chou in 2013, with the platform growing along with the Bitcoin price for the next six years, culminating in the awarding of a license from the CFTC in June that LedgerX said allowed them to offer physically backed Bitcoin futures contracts. This resulted in the launch of the related platform, Omni, the following month, scoring a win over rival Bakkt, who had yet to be awarded their equivalent license.
However, the launch was thrown immediately into chaos when the CFTC announced that the physically-backed element of the contract had not been cleared with them, causing the launch to be put on hold and an angry exchange of words between Paul Chou and the CFTC, with Chou threatening to sue the Commission for “anti-competitive behavior”. It soon emerged that the error had been to do with the passing of a CFTC deadline which LedgerX thought worked in their favor when in fact it had not.
Because the board’s decision has come some months after this incident it is unlikely that their removal is a direct result of it, although it may well have been part of a bigger picture of boardroom discontent if Juthica Chou’s theory is accurate:
there has been no reason given, except that we have had long-lasting disagreements with the board about the vision and direction of the business
— juthica (@juthica) December 9, 2019
Whatever the reason for the board’s move, it must be fairly galling for the Chou’s to see themselves ejected from the company they started and have been running for the past six years. LedgerX have moved to put Larry E. Thompson, a 30-year Wall Street veteran, in charge as interim Chief Executive Officer and Lead Director of the company while they seek to resolve the position long term.