According to a note from the Commodity Futures Trading Commission (CFTC), LedgerX LLC (dba FTX US Derivatives), has pulled its application to amend FTX’s Amended Order of Registration as a derivatives clearing organization to allow FTX to offer products that are not fully collateralized.
The request was originally submitted on December 6, 2021, and had yet to have been approved.
FTX acquired LedgerX in 2021, gaining a CFTC-regulated Designated Contract Market (DCM), Swap Execution Facility (SEF), and Derivatives Clearing Organization (DCO).
At that time, FTX said the new services would be made available to both retail and institutional investors 24×7 and offer block trading and algorithmic trading opportunities for institutional investors. It was described as a pivotal moment for the crypto sector.
When the deal was finalized, an FTX executive explained that as the regulatory environment in the crypto ecosystem evolved they looked forward to acting as a resource and an example of how the protections afforded by proper regulatory oversight and licensing can boost consumer confidence and facilitate safe and reliable exchange platforms.
FTX and many of its affiliated firms have filed for bankruptcy protection following allegations of malfeasance and a shortfall in funds after a “run on the bank” type event. LedgerX was not listed as an entity undergoing bankruptcy proceedings, so it is uncertain as to the status of the firm. LedgerX has not issued a statement and its website indicates “all systems are operational.”