Nicholas Owen Gunden, who is one of the earliest investors in LedgerX and a board member, published a letter detailing an apparent hostile takeover at the company.

LedgerX is the first regulated crypto exchange to offer fully collateralized and physically settled Bitcoin options and swaps in the United States, but problems arose when LedgerX tried to launch physically settled Bitcoin futures.

LedgerX CEO Paul Chou publicly claimed that the former Chairman of the Commodities Futures Trading Commission (CFTC), Christopher J. Giancarlo, had personal bias against LedgerX and improperly used his power to delay the approval of Bitcoin futures.

Specifically, Chou wrote a blog post which alleged that Giancarclo was giving preferential treatment to larger companies, in particular the Intercontinental Exchange (ICE) and Bakkt, in order to “cement his legacy” and not giving enough attention to LedgerX. After Chou’s blog post, Giancarlo informed LedgerX that he would delay LedgerX’s Bitcoin futures proposal.

Soon after that, Chou was removed from the CFTC’s Technology Advisory Committee due to “erratic and unprofessional behavior”.

A couple of months later, Chou and his wife Juthica Chou, who was the COO of LedgerX, were placed on administrative leave. A month after that, on Jan. 10, LedgerX Co-Founder Zach Dexter took over as CEO. Notably, the press release about Dexter becoming the CEO of LedgerX does not mention Paul or Juthica Chou.

Now Gunden, an early investor and board member, claims that LedgerX is in disarray due to what seems to be a hostile takeover.

It is important to note that the information in this article is mostly from Gunden’s letter, and it is just speculation and allegations at this point and cannot be confirmed. That being said, this information certainly raises questions about the solvency and stability of LedgerX going forward.

According to Gunden, LedgerX shareholder Miami International Holdings (MIAX) has been the only shareholder allowed to speak at recent board meetings. Gunden details how an extreme and one-sided case was made against Paul and Juthica Chou at a joint meeting between the Holdings and LLC boards, and no one was allowed to speak in their defense.

Additionally, Gunden says that a case was being made at these board meetings that LedgerX would go bankrupt unless Paul and Juthica Chou were removed. Gunden says this is wrong for a few reasons. The informal financial statements presented to the board before the vote were overly pessimistic. As well, no effort was made to solicit investors besides MIAX, and some investors were interested in investing if Juthica Chou were named CEO.

Even worse, LedgerX hired a $60,000 per month security firm after placing Paul and Juthica Chou on administrative leave, which is a seemingly unnecessary expense that significantly increased LedgerX’s burn rate. Gunden thinks this might be an attempt to drain LedgerX’s cash reserves in order to make a case for an emergency investment from MIAX.

Gunden goes on to describe how MIAX could receive a “sweetheart deal” that will dilute other shareholders and maybe doing all of this to gain ownership of LedgerX’s license. Gunden thinks that MIAX does not care if LedgerX shuts down, and that it just wants the license. Indeed, there is high employee turnover at LedgerX right now, according to Gunden, with most employees apparently interviewing for other jobs.

Ultimately, Gunden believes that MIAX and the Holdings Board are engaged in grossly negligent actions, and these actions may be in violation of CFTC regulations.