The crypto community had received a new reason to rejoice on July 31 as LedgerX, the US-regulated trading platform for physically-settled digital currency derivatives, had announced on its social media that its physical futures offering was now available on its Omni trading platform.
However, the very next day, it was revealed by the United States Commodities Futures Trading Commission (CFTC) that LedgerX’s physically-settled bitcoin futures had not yet received the agency’s approval.
LedgerX’s CEO Paul Chou took to Twitter and threatened to sue the CFTC for not doing “the right thing”. So, what exactly went wrong with Ledger X’s Bitcoin futures?
CFTC’s silence on the approval caused the confusion
The procedure for offering approved digital currency futures includes obtaining two approvals from the CFTC – first, the company’s approval to operate as a designated contract market (DCM) and second, an amendment to its derivatives clearing organization (DCO) license.
LedgerX had received the first approval – designation as a contract market on June 24. The amendment of its order of registration as a DCO was pending and this approval would have allowed it to clear futures listed on its DCM.
The CFTC has 180 days to review a DCO license application and approve or reject it. According to Juthica Chou, the co-founder of LedgerX, the company had submitted their application on November 8, 2018, and had received emails from CFTC confirming that no additional items were needed to process the application for their amendment.
The company, in the absence of any communication on the approval or rejection of the DCO application, apparently assumed that their application had been accepted. However, a CFTC official confirmed that the company needed explicit communication pointing to the amendment to its registration.
“Every new or amended DCO application needs to be affirmatively approved by the Commission. The absence of a decision does not constitute approval, and entity self-certification is not an option,” stated the official.
Following the CFTC’s contradiction to the Bitcoin futures’ approval, Paul Chou lashed out against the agency on his Twitter account for not doing their job and even threatened to sue them. There were no more updates from LedgerX or the CFTC on the status of the Bitcoin futures at the time of writing this article.
Bitcoin Futures Platform Bakkt may be launched soon
The other company that has been in the limelight for its connection with Bitcoin futures is the Intercontinental Exchange (ICE) backed Bakkt, a Bitcoin futures platform that is expected to be released soon. The exchange began testing two of its futures contract on July 22, but it still has some pending regulatory approvals before it can be launched to the public.
According to Jeffrey Sprecher, the CEO of ICE –
“Subject to final regulatory approvals, we plan to launch our physically-settled bitcoin futures in the very near future.”
The date for Bakkt’s launch has not been revealed as yet. The crypto community is quite hopeful about the launch of Bakkt as it signifies the progression of the cryptocurrency space and will allow more players to feel secure about investing in cryptocurrency-based products.