Premature Launch of Bitcoin Futures Turns Ugly for LedgerX Exchange

(Bloomberg) -- The bragging rights to become the first cryptocurrency exchange to allow small investors to buy derivatives that pay out with Bitcoins are still up for grabs.

After being touted with much fanfare Wednesday on crypto news sites, LedgerX, a U.S.-regulated Bitcoin derivatives exchange and clearinghouse, said Thursday that it was a bit premature in announcing the availability of the futures to retail investors.

Events soon took a turn. Paul Chou, the chief executive of LedgerX, took to Twitter to blast the U.S. Commodity Futures Trading Commission for “breaking the law” in several expletives-filled tweets. He later pulled some of the remarks, saying the agency asked him to censor his comments, while defending his right to free speech. LedgerX's public relations representative tweeted that he was no longer working with the company.

“LedgerX requested that the CFTC amend their order of registration as a DCO to also include clearing futures listed on its DCM,” said Michael Short, a CFTC spokesman. “That process has not yet been completed.”

Short declined to comment on Chou's tweet. Chou didn't immediately return requests for comment.

LedgerX already acts as a swap execution facility for institutional crypto traders with at least $10 million in assets. The New York-based firm announced it was letting consumers living in the U.S. and Singapore to sign up to trade starting last month, and was already phasing in consumer traders on its waiting list, according to Chou's prior interviews.

To contact the reporters on this story: Olga Kharif in Portland at okharif@bloomberg.net;Ben Bain in Washington at bbain2@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Randall Jensen

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