A LedgerX director and investor has withdrawn his funds and alleged the company may be failing its investors in a dramatic letter obtained by CoinDesk.

Nicholas Owen Gunden wrote in a letter addressed to the LedgerX Holdings board, LedgerX LLC board, LedgerX shareholders, and the Office of the Inspector General at the Commodity Futures Trading Commission (CFTC) that he was concerned about how the bitcoin derivatives provider was operating since the company’s founders were placed on administrative leave on Dec. 9.

“I am concerned with recent developments at the company, particularly the fact and manner in which the founders, Paul Chou and Juthica Chou, and particularly Juthica, have been barred from continuing their roles at the company,” he wrote.

According to an exhibit filed by LedgerX in its designated contract market (DCM) application, Gunden has been a board member since 2017 as a market participant, and was on the company’s disciplinary panel as of last year.

In a three-page list of concerns, he explained that since the founders were ousted, no one has acted as his point of contact and alleged that some shareholders appeared to be receiving preferential treatment.

“Just days after Paul and Juthica were placed on administrative leave, a petition was circulated at the office, which 75% of employees signed in support of retaining Paul and Juthica’s leadership. I have seen a copy of this petition and believe it to be legitimate,” he wrote.

However, two of the employees who filed the petition were fired, “apparently in retaliation,” he alleged.

He is also concerned that LedgerX may no longer be compliant with regulatory requirements and may be failing in its fiduciary duties.

LedgerX board member Mark Wetjen did not immediately return a request for comment.

Questionable firing

In his letter, Gunden suggested that Juthica Chou’s suspension from her roles as chief financial and risk officer of the company may be posing more harm than good to LedgerX.

He detailed the meeting the board held to suspend Juthica and her husband Paul, saying “an extreme and one-sided case” was presented against the two, but there was no opportunity for defense.

“While a case can be made against Paul due to his recent external communications, no comparable case can be made against Juthica, and yet she is being removed as well in spite of being the best suited candidate for CEO,” he said.

He appears to be referencing Tweets and possibly letters written by Paul Chou alleging wrongdoing on the part of the CFTC after the company was not allowed to launch physically-settled bitcoin futures contracts last year.

“Just days after Paul and Juthica were placed on administrative leave, a petition was circulated at the office, which 75% of employees signed in support of retaining Paul and Juthica’s leadership. I have seen a copy of this petition and believe it to be legitimate,” he wrote.

However, two of the employees who filed the petition were fired, “apparently in retaliation,” Gunden alleged.

Shareholder letters “outlining concerns” with the interim management had been ignored, and while some minority investors in the company have expressed interest in backing the company further, this is contingent upon Juthica Chou being named the new CEO.

Attempted takeover?

Gunden expressed concerns that Miami International Holdings (MIAX), one shareholder in the company, might be attempting to take over the company, or at least acquire its regulatory licenses.

Gunden said MIAX was the only shareholder invited to attend and participate in certain private board meetings, which he found problematic. Aside from board members, no other shareholders were present.

Further, he alleged that a Holdings board member may be accepting “payouts for helping MIAX to complete an insider funding round.”

LedgerX CFO Jennifer Liu has been kept in the dark regarding the Holdings board’s actions, he added (Liu did not immediately return CoinDesk’s request for comment).

Other concerns include that the Holdings board presented “overly pessimistic” financial statements to the board of directors; that the company does not appear to be trying to raise funds outside of MIAX; and that the company is spending an extra $60,000 per month by hiring a security company.

“From what I can tell, the Holdings board is engaged in grossly negligent actions towards LedgerX market participants, employees, shareholders, and perhaps even CFTC compliance requirements themselves,” he wrote.

As such, many staffers are expecting the worst, Gunden wrote: “I have spoken with two current employees and learned that there is a lot of confusion and uncertainty at the company, and I’ve received reports that many employees are interviewing elsewhere in anticipation of the company shutting down.”

Read the full letter below: