LedgerX may have placed its founders "on administrative leave," but they're still listed as the company's leaders on its website (via LedgerX).
People,  Regulation

LedgerX founders Paul and Juthica Chou ousted after futures debacle

Badly embarrassed by a bungled futures launch, the derivatives exchange removed its CEO and COO the same day rival Bakkt expanded its offerings

The timing had to hurt.

On Dec. 9, LedgerX derivatives exchange CEO Paul Chou and his wife Juthica, the COO, were unceremoniously removed by the board of the company they founded. 

While no explanation was given, LedgerX suffered a huge and embarrassing setback over the summer. It wrongly announced that it had beaten several much-larger rivals to the first license to offer physically settled bitcoin futures. 

That same day the couple was removed one of those rivals, Intercontinental Exchange’s (ICE) Bakkt, announced that it had launched bitcoin options and cash-settled futures contracts. Adding insult to injury, Bakkt CEO Kelly Loeffler was appointed to a U.S. Senate seat five days earlier.

Nor is Bakkt the only cryptocurrency derivatives firm moving forward as LedgerX still awaits its futures license.

Malta-based OKEx also announced on Dec. 9 that it plans to offer bitcoin options before the end of the year. CME Group, another much larger LedgerX rival and owner of the Chicago Mercantile Exchange, said in November it plans to launch bitcoin options in January of 2020. 

Both options and futures are types of derivatives, which are contracts based on the value of an underlying asset, such as bonds, beef, or bitcoins.

No explanation given

Paul and Juthica Chou were not fired but “placed on administrative leave” by the board, according to a press release. Larry Thompson was appointed interim CEO, as well as lead director of Ledger Holding.

The release gave no details about the cause of the couple’s ouster.

Juthica Chou tweeted, “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.” 

An embarrassing loss

On July 31, Paul Chou announced with great fanfare that his recently-formed had not only won the first license, it had beaten two titans to the finish line. These were Chicago Mercantile Exchange (CME) and ICE, which owns the New York Stock Exchange as well as Bakkt. 

He had celebrated too soon. The next day, the Commodity Futures Trading Commission (CFTC) announced that the company had not received that license.

Paul Chou promptly went on a Twitter rampage so outrageous and profane his public relations firm quit within 24 hours

Chou accused former CFTC Chairman Christopher Giancarlo of “personal animus” due to an unflattering blog post Chou had written. Chou also said the CFTC was “breaking the law” and had “acted in horrible ‘good faith.” He promised to sue the agency. 

It later came out that in early July, Chou had written a pair of letters to the CFTC, accusing “Crypto-Dad” Giancarlo of deliberately delaying and sabotaging LedgerX’s license applications. 

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.