Regulation & Security
LedgerX is a U.S. federally regulated exchange and clearinghouse. LedgerX holds three licenses with the U.S. Commodity Futures Trading Commission (CFTC):
- Derivatives Clearing Organization (DCO)
- Designated Contract Market (DCM)
- Swap Execution Facility (SEF)
These licenses enable us to operate our exchange and clearinghouse in all 50 states in the US (including its territories), with access to certain international jurisdictions.
What is the CFTC?
The U.S. Commodity Futures Trading Commission (CFTC) is an independent federal agency of the U.S. Government and oversees and regulates derivatives markets, including swaps, options and futures on bitcoin and ethereum.
All trades executed on LedgerX DCM are cleared by the LedgerX DCO.
- Anti Money Laundering (AML): Ernst & Young staff conducted a full analysis and review of our OFAC (Office of Foreign Assets Control) procedures and AML processes, strategy, policy, controls and related technologies
- Financial Condition: Grant Thorton audited LedgerX’s financial condition and expressed an unqualified opinion (i.e., clean bill of health) that our financial statements were presented fairly, in all material respects, in accordance with US GAAP accounting principles.
- Digital Currency: Because we custody bitcoin on behalf of our clients, Grant Thorton conducted a thorough examination of how we hold digital assets
- Security: Praetorian, a trusted name in cybersecurity, performed an Information Technology (IT) Security Risk Assessment that evaluated the effectiveness of LedgerX’s existing security controls.
- Internal Controls: Friedman LLP, a well known auditor in digital currency accounting, conducted an audit of our internal controls (technically known as a SOC I Type II Audit) to ensure that they are operating effectively and appropriately protecting client data.
- Onsite IT systems: Every year, the CFTC examines one aspect of our operations with a special emphasis. Last year, this examination covered our onsite systems and safeguards.