LedgerX member Says Company in Disarray After Founders’ Ouster

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Nicholas Owen Gunden wrote during a letter addressed to the LedgerX Holdings board, LedgerX LLC board, LedgerX shareholders, and therefore the Office of the military officer at the Commodity Futures Trading Commission (CFTC) that he was concerned about how the bitcoin derivatives provider was operating since the company’s founders were placed on administrative leave on Dec. 9.

“I am concerned with recent developments at the corporate , particularly the very fact and manner during which the founders, Paul Chou and Juthica Chou, and particularly Juthica, are barred from continuing their roles at the corporate ,” he wrote.

According to an exhibit filed by LedgerX in its designated contract market (DCM) application, Gunden has been a member since 2017 as a market participant, and was on the company’s disciplinary panel as of last year.

In a three-page list of concerns, he explained that since the founders were ousted, nobody has acted as his point of contact and alleged that some shareholders seemed to be receiving preferential treatment.

“Just days after Paul and Juthica were placed on administrative leave, a petition was circulated at the office, which 75% of employees signed in support of retaining Paul and Juthica’s leadership. I even have seen a replica of this petition and believe it to be legitimate,” he wrote.

However, two of the workers who filed the petition were fired, “apparently in retaliation,” he alleged.

He is also concerned that LedgerX may not be compliant with regulatory requirements and should be failing in its fiduciary duties.

LedgerX member Mark Wetjen didn’t immediately return an invitation for comment.

Questionable firing
In his letter, Gunden suggested that Juthica Chou’s suspension from her roles as chief financial and risk officer of the corporate could also be posing more harm than good to LedgerX.

He detailed the meeting the board held to suspend Juthica and her husband Paul, saying “an extreme and one-sided case” was presented against the 2 , but there was no opportunity for defense.

“While a case are often made against Paul thanks to his recent external communications, no comparable case are often made against Juthica, and yet she is being removed also in spite of being the simplest suited candidate for CEO,” he said.

He appears to be referencing Tweets and possibly letters written by Paul Chou alleging wrongdoing on the a part of the CFTC after the corporate wasn’t allowed to launch physically-settled bitcoin futures contracts last year.

“Just days after Paul and Juthica were placed on administrative leave, a petition was circulated at the office, which 75% of employees signed in support of retaining Paul and Juthica’s leadership. I even have seen a replica of this petition and believe it to be legitimate,” he wrote.

However, two of the workers who filed the petition were fired, “apparently in retaliation,” Gunden alleged.

Shareholder letters “outlining concerns” with the interim management had been ignored, and while some minority investors within the company have expressed interest in backing the corporate further, this is often contingent upon Juthica Chou being named the new CEO.

Attempted takeover?
Gunden expressed concerns that Miami International Holdings (MIAX), one shareholder within the company, could be attempting to require over the corporate , or a minimum of acquire its regulatory licenses.

Gunden said MIAX was the sole shareholder invited to attend and participate in certain private board meetings, which he found problematic. apart from board members, no other shareholders were present.

Further, he alleged that a Holdings member could also be accepting “payouts for helping MIAX to finish an insider funding round.”

LedgerX CFO Jennifer Liu has been kept within the dark regarding the Holdings board’s actions, he added (Liu didn’t immediately return CoinDesk’s request for comment).

Other concerns include that the Holdings board presented “overly pessimistic” financial statements to the board of directors; that the corporate doesn’t appear to be trying to boost funds outside of MIAX; which the corporate is spending an additional $60,000 per month by hiring a security company.

“From what I can tell, the Holdings board is engaged in grossly negligent actions towards LedgerX market participants, employees, shareholders, and maybe even CFTC compliance requirements themselves,” he wrote.

As such, many staffers expect the worst, Gunden wrote: “I have spoken with two current employees and learned that there’s tons of confusion and uncertainty at the corporate , and I’ve received reports that a lot of employees are interviewing elsewhere in anticipation of the corporate shutting down.”

Read the complete letter below:

UPDATE (Jan. 10, 18:45 UTC): this text has been updated with additional information, including the complete letter.

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