“The Bitcoin market doesn’t have enough regulation for the individual investor to feel safe”
This is a fairly common response from people when you ask why they haven’t invested in Bitcoin. Frankly, prior to joining LedgerX, I actually thought there was a lot of truth in that statement. Coming from the extremely regulated (and sometimes over-regulated) SEC and FINRA environment, the Bitcoin world just seemed too risky, too difficult to trust as an investment. Then I started to actually do my own research on Bitcoin, met with the team at LedgerX and ultimately joined the Firm in January. When it comes to the regulation surrounding Bitcoin and specifically the derivatives listed on LedgerX, here’s what you should know…
The Bitcoin derivates offered on our exchange are governed by the CFTC, an independent US Federal Agency that has been regulating the commodity futures and options markets since 1974. CFTC staff have helped guide LedgerX since 2014, in order to provide investors with a safe and reliable platform where they can invest in Bitcoin derivatives.
In addition to the CFTC supervision, in the past 3 years, LedgerX has had the following independent audits, which covered Financials, Anti Money Laundering, Cybersecurity, and Internal Controls.
Ernst and Young AML and KYC Audit
EY conducted a full assessment of the design and implementation of LedgerX’s anti-money laundering (AML) and OFAC processes. Specifically, EY staff conducted an analysis and review of our AML strategy, policy, procedures, controls and related technologies.
Grant Thornton audited LedgerX’s financial condition and expressed an unqualified opinion that our financial statements were presented fairly, in all material respects, in accordance with accounting principles generally accepted in the US. An unqualified opinion represents a clean bill of health with respect to LedgerX operations, internal controls, regulatory compliance, and transaction integrity.
Digital Currency Audit
Also performed by Grant Thornton, this audit was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.
Praetorian performed an Information Technology (IT) Security Risk Assessment that evaluated the effectiveness of LedgerX’s existing security controls.
SOC I Type II Audit
An Independent Auditor is conducting a SOC I Type II Audit of LedgerX. A SOC I audit focuses on the internal controls at the firm and aims to provide users with reasonable assurance that these controls are operating effectively and appropriately protecting client data. The Type II portion of the audit increases the scope vs. a Type I and has the auditors review at minimum a six-month period of operations.
These audits are all in addition to our CFTC Systems Safeguards Examination which took place in 2018.
From day 1, LedgerX has lived by the belief that regulation can coexist with innovation. Our founders took the revolutionary idea of Bitcoin as an independent, open-source form of currency, stored on a decentralized network and chose to embrace the regulations necessary to create an exchange where an individual can easily invest. This decision to welcome regulation is what has allowed LedgerX to be the first federally regulated Bitcoin Options and Swaps exchange and clearing house in the country, a place that investors can trust.
So, if you’re thinking about the regulations surrounding Bitcoin – well, that’s a good thing, because so are we!