Ledger Holdings Inc

152 Madison Avenue, 21st Fl.

New York, NY 10016

https://ledgerx.com

June 10, 2018

VIA SEF & DCO COMMISSION PORTALS

Christopher J. Kirkpatrick

Secretary, Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581

Re: Commission Regulation 40.6(a) – Rule Certification 

LedgerX LLC Submission No. 18-17

Confidential Treatment Requested by LedgerX LLC as to Appendices C & D

Dear Mr. Kirkpatrick:

LedgerX LLC (“LedgerX”) hereby notifies the Commodity Futures Trading Commission (the 

“Commission”), pursuant to Section 5c(c) of the Commodity Exchange Act (the “CEA”) and 

Commission Regulation 40.6(a), that it is certifying the attached changes and amendments to its 

Rulebook, Operations Manual, and AML Policy. The attached changes and amendments will 

become effective no earlier than June 25, 2018. 

A concise explanation and analysis of the changes and amendments and their compliance with 

applicable provisions of the CEA, including the Core Principles, and the Commission’s 

Regulations, is attached hereto as Appendix A. A marked copy of the changes and amendments to 

the Rulebook is designated as Appendix B. A marked copy of the changes and amendments to the 

Operations Manual is designated as Appendix C. A marked copy of the changes and amendments 

to the AML Policy is designated as Appendix D. 

LedgerX certifies that the changes and amendments comply with the CEA and Commission 

Regulations thereunder. LedgerX additionally certifies that it has concurrently posted a copy of 

this submission letter and the non-confidential attachments hereto on LedgerX’s website at 

https://ledgerx.com/. LedgerX is not aware of any or substantive opposing views to the changes 

and amendments.

* * * *
Ledger Holdings Inc

Please contact the undersigned at (917) 935-6727 or alex@ledgerx.com if you have any questions 

or you would otherwise like to discuss this further.

Sincerely,

Alex C. Levine

Chief Compliance Officer & Head of Legal

LedgerX LLC
Ledger Holdings Inc

Appendix A

Rule/Section Explanations Core Principle or other CEA 

Provision, Commission 

Regulation and/or Commission 

Staff Letter

--Rule 5.3(A)

--Operations 

Manual Section 

VIII.C.

LedgerX is modifying the number of 

order types available to Participants 

by removing the Market Order type. 

No participant has yet to enter a 

Market Order during the time the 

LedgerX exchange has been in 

operation.

SEF Core Principles 2 & 7.

Given no Participant has yet to 

enter a Market Order, eliminating 

this order type will bring clarity to 

Participants and potential 

applicants looking to become 

Participants as to the actual order 

types that will be encountered and 

able to be utilized on the LedgerX 

exchange. 

--Rule 3.2(A)

--AML Policy, 

changes 

throughout

After discussions with regulators at 

the Monetary Authority of 

Singapore (MAS), LedgerX has 

decided to allow citizens and entities 

incorporated in Singapore, which 

meet the requirement to become a 

Participant, to utilize the LedgerX 

platform. As a result, Participant 

requirements and AML procedures 

have been updated to allow for 

operations to occur and meet 

regulatory requirements in 

Singapore. 

The regulatory requirements in 

Singapore encompass additional 

AML/KYC requirements as MAS 

has indicated that no license or 

registration is currently required for 

operating a bitcoin derivatives 

exchange or clearinghouse in 

Singapore. However, LedgerX will 

monitor developments and continue 

to have conversation with MAS

should additional requirements for 

running an exchange and 

clearinghouse for bitcoin derivatives 

SEF Core Principle 2, DCO Core 

Principles C & R, and Regulation 

39.27(c).

As to the Core Principles, by 

allowing persons and entities in 

Singapore to join the LedgerX 

platform, this will allow greater

access along with a corresponding

increase liquidity of products 

traded and cleared by LedgerX as 

well as a deepening of the order 

book. This will have the likely 

effect of reducing bid/ask spreads 

and ensuring the existence of more 

bid/asks for all contract types

offered by LedgerX. Such an 

impact would benefit Participants 

in the U.S. in addition to potential 

Participants in Singapore. It will 

also assist in the maturation of the 

market for bitcoin derivatives, 

given bitcoin trades worldwide on 

a 24-hour basis, by allowing 

LedgerX access to bitcoin holders 

and traders in an additional country 
Ledger Holdings Inc

be imposed in the future. LedgerX's 

bank that custodies Participant 

funds, Silvergate Bank, has 

indicated that it is able to accept 

USD funds from Singapore or other 

international banks. 

Thus, outside of instituting 

enhanced AML/KYC procedures 

and requirements for applicants 

from Singapore, there will be little 

modification to operational 

processes to operate the LedgerX 

platform in regard to Participants 

located in Singapore. For example, 

such Participants will still be 

required to transact in USD and to 

meet ECP requirements. All trades 

in BTC will still be fully 

collateralized with no changes to the 

custody of either bitcoin of USD. 

And, all Participants will be 

explicitly subject to CFTC 

jurisdiction regardless of location.

by meeting applicable legal and 

regulatory requirements there.

As to Regulation 39.27(c):

• There is no conflict between 

CFTC and Singapore 

regulations for a clearinghouse

due to the lack of any 

regulatory obligations (other 

than AML) in Singapore 

currently. And, LedgerX’s 

rulebook is being modified to 

add a rule stating that all 

Participants will be bound by 

CFTC regulations regardless 

of location.

• Regarding the enforceability 

of a choice of law clause, the 

LedgerX user agreement 

currently states that New York 

law will govern the agreement. 

This will not change for 

Singapore participants. And, 

such a choice of law clause is 

enforceable in Singapore.1

• Regarding the enforceability 

of its rules, procedures, and 

contracts, such requirements 

are applicable to all 

Participants or other parties 

regardless of location. And, 

concurrent with the choice of 

law enforceability precedent 

cited in footnote 1, these 

requirements are similarly 

enforceable under Singapore 

jurisdiction.

 1 The Singapore High Court has affirmed the principle that, where a contract includes a choice of law provision, it is 

the law governing the underlying contract (and not the location of the court) that will apply, even if the choice of law 

is that of a foreign jurisdiction. In fact, the choice of law jurisdiction in that case was New York law specifically. 

Thus, LedgerX's choice of law clause is enforceable under Singapore jurisdiction in addition to its contracts. (See: 

BCY v. BCZ, [2016] SGHC 249 -- https://www.supremecourt.gov.sg/docs/default-source/moduledocument/judgement/bcy-v-bcz-(for-release)-(08-11-2016)-pdf.pdf.)
Ledger Holdings Inc

Appendix B

[SEE RULEBOOK REDLINE]
Ledger Holdings Inc

Appendix C

[SEE OPERATIONS MANUAL REDLINE – CONFIDENTIAL TREATMENT REQUESTED]
Ledger Holdings Inc

Appendix D

[SEE AML POLICY REDLINE – CONFIDENTIAL TREATMENT REQUESTED]