Difference between revisions of "Bakkt"

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{{Infobox_Company  <!-- Feel free to remove comments like this when you add real info -->
 
{{Infobox_Company  <!-- Feel free to remove comments like this when you add real info -->
 
| company_name = Bakkt
 
| company_name = Bakkt
 
| company_logo =  [[Image:bakkt.jpg{{!}}200px]]
 
| company_logo =  [[Image:bakkt.jpg{{!}}200px]]
| key_people =    [[Kelly Loeffler]], CEO; Adam White, COO; Mike Blandina, Chief Product Officer
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| key_people =    David Clifton, interim CEO; Adam White, President; Nicholas Cabrera, Chief Product Officer; Matthew Johnson, CTO
 
| foundation =    2018
 
| foundation =    2018
 
| location =      Atlanta, Georgia  
 
| location =      Atlanta, Georgia  
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Bakkt is a digital assets custody service created by and affilated with [[Intercontinental Exchange]] (ICE).<ref>{{cite web|url=https://medium.com/bakkt-blog/about|name=Blog|org=Bakkt|date=September 10, 2019}}</ref> Its formation was announced by ICE on August 3, 2018. The company named Microsoft and Starbucks as partners.<ref>{{cite web|url=https://www.businesswire.com/news/home/20180803005236/en/Intercontinental-Exchange-Announces-Bakkt-Global-Platform-Ecosystem|name=Intercontinental Exchange Announces Bakkt, a Global Platform and Ecosystem for Digital Assets|org=Business Wire|date=August 6, 2018}}</ref>  
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Bakkt is a [[digital assets]] custody service created by and affilated with [[Intercontinental Exchange]] (ICE).<ref>{{cite web|url=https://medium.com/bakkt-blog/about|name=Blog|org=Bakkt|date=September 10, 2019}}</ref>  
  
Bakkt announced that it would launch unmargined deliverable futures trading in November 2018.<ref>{{cite web|url=https://www.cnbc.com/2018/08/03/starbucks-partners-with-microsoft-ice-on-new-cryptocurrency.html|name=New Starbucks partnership with Microsoft allows customers to pay for Frappuccinos with bitcoin|org=CNBC|date=August 3, 2018}}</ref> In a company blog post dated November 20, 2018, however, the company said that the launch of futures trading was delayed until January 24, 2019, as Bakkt continued to work with the U.S. [[Commodity Futures Trading Commission]] to gain its approval.<ref>{{cite web|url=https://medium.com/bakkt-blog/launch-and-faqs-e1a3f7691d7b|name=Launch update + reader FAQs|org=Bakkt|date=July 25, 2019}}</ref> According to a Wall Street Journal article in March 2019, Bakkt, whose operations were held in abeyance at the time, lacked CFTC approval for its plans to handle customer funds, including those denominated in cryptocurrencies.<ref>{{cite web|url=https://www.wsj.com/articles/bitcoin-futures-launch-hits-regulatory-snag-11553204037?mod=e2tw|name=Bitcoin Futures Launch Hits Regulatory Snag|org=The Wall Street Journal|date=March 22, 2019}}</ref>
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== Overview ==
  
Bakkt announced that it had received investments of $182.5 million on December 31, 2018. The twelve investors included ICE, Boston Consulting Group, [[Galaxy Digital]], Goldfinch Partners, Alan Howard, Horizons Ventures, Microsoft's venture funding arm and Pantera Capital. Starbucks was not mentioned.<ref>{{cite web|url=https://cointelegraph.com/news/nyse-operators-crypto-platform-bakkt-completes-1825-million-funding-round|name=NYSE Operator’s Crypto Platform Bakkt Completes $182.5 Million Funding Round|org=Cointelegraph|date=March 22, 2019}}</ref>
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Bakkt's formation was announced by ICE on August 3, 2018. The company named Microsoft and Starbucks as partners.<ref>{{cite web|url=https://www.businesswire.com/news/home/20180803005236/en/Intercontinental-Exchange-Announces-Bakkt-Global-Platform-Ecosystem|name=Intercontinental Exchange Announces Bakkt, a Global Platform and Ecosystem for Digital Assets|org=Business Wire|date=August 6, 2018}}</ref>  
  
Kelly Loeffler, spouse of ICE CEO Jeffrey Sprecher, is the CEO of Bakkt. In October 2018, Bakkt announced that Adam White, the "fifth employee" of [[Coinbase]], would join as COO..<ref>{{cite web|url=https://www.theblockcrypto.com/2018/10/11/coinbases-adam-white-is-joining-bakkt-as-its-coo/|name=Coinbase’s Adam White is joining Bakkt as its COO|org=The Block|date=October 12, 2018}}</ref> In April 2019, Bakkt announced that it had hired  PayPal and Google veteran Mike Blandina as Chief Product Officer.<ref>{{cite web|url=https://blocktribune.com/bitcoin-futures-exchange-bakkt-hires-mike-blandina-as-chief-product-officer/|name=Bitcoin Futures Exchange Bakkt Hires Mike Blandina As Chief Product Officer|org=BlockTribune|date=September 13, 2019, 2019}}</ref> In June 2019, Bakkt brought on Chris Petersen, a former payments product strategist from Google, to help the firm launch its mobile app-based wallet, dubbed Bakkt Pay.<ref>{{cite web|url=https://www.theblockcrypto.com/2019/06/20/bakkt-brings-on-google-ux-expert-as-it-builds-its-consumer-app-for-spending-cryptocurrency/|name=Bakkt brings on Google payments expert as it builds its consumer app for spending cryptocurrency|org=Bakkt|date=June 27, 2019}}</ref>  
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Bakkt said at the time that ICE Futures US would launch unmargined deliverable futures trading in November 2018.<ref>{{cite web|url=https://www.cnbc.com/2018/08/03/starbucks-partners-with-microsoft-ice-on-new-cryptocurrency.html|name=New Starbucks partnership with Microsoft allows customers to pay for Frappuccinos with bitcoin|org=CNBC|date=August 3, 2018}}</ref> In a company blog post dated November 20, 2018, however, the company said that the launch of futures trading was delayed until January 24, 2019, as Bakkt continued to work with the U.S. [[Commodity Futures Trading Commission]] to gain its approval.<ref>{{cite web|url=https://medium.com/bakkt-blog/launch-and-faqs-e1a3f7691d7b|name=Launch update + reader FAQs|org=Bakkt|date=July 25, 2019}}</ref> According to a Wall Street Journal article in March 2019, Bakkt, whose operations were held in abeyance at the time, lacked CFTC approval for its plans to handle customer funds, including those denominated in cryptocurrencies.<ref>{{cite web|url=https://www.wsj.com/articles/bitcoin-futures-launch-hits-regulatory-snag-11553204037?mod=e2tw|name=Bitcoin Futures Launch Hits Regulatory Snag|org=The Wall Street Journal|date=March 22, 2019}}</ref>  
  
Bakkt announced its five-member board of directors on March 29, 2019. The members include Akshay Naheta, managing partner at Softbank, Sean Collins, managing partner at Goldfinch Partners, Kelly Loeffler, Jeff Sprecher, and Tom Noonan, member of the ICE board of directors who will also serve as chairman of the Bakkt board.<ref>{{cite web|url=https://www.coindesk.com/bakkt-taps-former-ibm-and-cisco-exec-tom-noonan-to-chair-its-board|name=Bakkt Taps Former IBM and Cisco Exec Tom Noonan to Chair Its Board|org=CoinDesk|date=March 29, 2019}}</ref>  
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Bakkt announced that it had received investments of $182.5 million on December 31, 2018. The twelve investors included ICE, Boston Consulting Group, [[Galaxy Digital]], Goldfinch Partners, Alan Howard, Horizons Ventures, Microsoft's venture funding arm and Pantera Capital. Starbucks was not mentioned.<ref>{{cite web|url=https://cointelegraph.com/news/nyse-operators-crypto-platform-bakkt-completes-1825-million-funding-round|name=NYSE Operator’s Crypto Platform Bakkt Completes $182.5 Million Funding Round|org=Cointelegraph|date=March 22, 2019}}</ref> In the following February, leveraging Bakkt's fame an unidentified individual sent emails trying to attract potential investors for a second round of investments in Bakkt in a blatant scam. The emails asked recipients to register names, email addresses and wallet addresses at bakktplatform.io.<ref>{{cite web|url=https://www.financemagnates.com/cryptocurrency/news/fraud-alert-fake-bakkt-website-is-seeking-funds/|name=Fraud Alert: Fake Bakkt Website is Seeking Funds|org=Fortune|date=February 25, 2019}}</ref>  
  
== Custody ==
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Kelly Loeffler, spouse of ICE CEO Jeffrey Sprecher, was the first CEO of Bakkt. In October 2018, Bakkt announced that Adam White, who was the fifth employee hired by [[Coinbase]] and now the second hired by Bakkt, would join as COO.<ref>{{cite web|url=https://www.theblockcrypto.com/2018/10/11/coinbases-adam-white-is-joining-bakkt-as-its-coo/|name=Coinbase’s Adam White is joining Bakkt as its COO|org=The Block|date=October 12, 2018}}</ref> In April 2019, Bakkt announced that it had hired PayPal and Google veteran Mike Blandina as Chief Product Officer.<ref>{{cite web|url=https://blocktribune.com/bitcoin-futures-exchange-bakkt-hires-mike-blandina-as-chief-product-officer/|name=Bitcoin Futures Exchange Bakkt Hires Mike Blandina As Chief Product Officer|org=BlockTribune|date=September 13, 2019, 2019}}</ref> In June 2019, Bakkt  brought on Chris Petersen, a former payments product strategist from Google, to help the firm launch its mobile app-based wallet, dubbed Bakkt Pay.<ref>{{cite web|url=https://www.theblockcrypto.com/2019/06/20/bakkt-brings-on-google-ux-expert-as-it-builds-its-consumer-app-for-spending-cryptocurrency/|name=Bakkt brings on Google payments expert as it builds its consumer app for spending cryptocurrency|org=Bakkt|date=June 27, 2019}}</ref>
  
Bakkt established Bakkt Trust Company which received a charter from the New York State Department of Financial Services (NYDFS) on August 16, 2019. The NYDFS "has authorized Bakkt to provide custody services for bitcoin in conjunction with the launch of physically delivered bitcoin futures contracts. Bakkt will serve institutional customers; its bitcoin futures contracts will be listed for trading on Intercontinental Exchange (ICE) Futures US and cleared through ICE Clear US."<ref>{{cite web|url=https://www.dfs.ny.gov/reports_and_publications/press_releases/pr1908161|name=FINANCIAL SERVICES SUPERINTENDENT LINDA A. LACEWELL ANNOUNCES DFS GRANTS CHARTER TO BAKKT|org=New York Department of Financial Services|date=September 12, 2019}}</ref>
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Bakkt announced its five-member board of directors on March 29, 2019. The members include Akshay Naheta, managing partner at Softbank, Sean Collins, managing partner at Goldfinch Partners, Kelly Loeffler, Jeff Sprecher, and Tom Noonan, member of the ICE board of directors who will also serve as chairman of the Bakkt board.<ref>{{cite web|url=https://www.coindesk.com/bakkt-taps-former-ibm-and-cisco-exec-tom-noonan-to-chair-its-board|name=Bakkt Taps Former IBM and Cisco Exec Tom Noonan to Chair Its Board|org=CoinDesk|date=March 29, 2019}}</ref>
  
Bakkt provides "warm" [[wallet]] insurance for its customers. It may also offer services for 401(k) accounts and IRAs based on bitcoin.<ref>{{cite web|url=https://www.forbes.com/sites/rebeccacampbell1/2018/11/21/ice-postpones-bakkts-bitcoin-futures-launch-to-january-2019/#150ed8ec2e27|name=ICE Postpones Bakkt's Bitcoin Futures Launch To January 2019|org=Forbes|date=November 21, 2018}}</ref>
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ICE announced on December 4, 2019 that Loeffler had been appointed to the U.S. Senate to complete the remaining year of retiring Republican Georgia Senator Johnny Isakson's term.<ref>{{cite web|url=https://ir.theice.com/press/press-releases/all-categories/2019/12-04-2019-151603325|name=Press Release|org=Intercontinental Exchange|date=January 8, 2020}}</ref>
  
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On December 23, 2019, Bakkt announced that ICE had appointed Blandina as CEO and Adam White as president of the company.<ref>{{cite web|url=https://ir.theice.com/press/press-releases/all-categories/2019/12-23-2019-132935459|name=Press Release|org=Bakkt|date=January 8, 2020}}</ref> Nicholas Cabrera became the new chief product officer.<ref>{{cite web|url=https://www.bakkt.com/about-us|name=Bakkt by experienced leadership|org=Bakkt|date=March 17, 2020}}</ref>
  
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In April 2020, Bakkt announced that Blandina was leaving to work at JPMorgan. Bakkt appointed David Clifton as interim chief executive officer.<ref>{{cite web|url=https://www.reuters.com/article/ice-moves-jp-morgan/update-1-bakkt-boss-to-leave-for-jpmorgan-source-idUSL3N2CB43E|name=REFILE-UPDATE 1-Bakkt boss to leave for JPMorgan - source|org=Reuters|date=May 6, 2020}}</ref>
  
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== Services ==
  
=== Fake Bakkt Investment Scam ===
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=== Custody ===
 
 
In February 2019, an unidentified individual began sending emails in broken English, trying to attract potential investors for a second round of investments. The emails instructed their recipients to register their names and email addresses at bakktplatform.io, then provide a wallet address and send funds to a bitcoin address provided in a separate email. Representatives from ICE confirmed to Coindesk that this website is fake, and the person sending the emails is not affiliated with ICE or Bakkt.<ref>{{cite web|url=https://www.financemagnates.com/cryptocurrency/news/fraud-alert-fake-bakkt-website-is-seeking-funds/|name=Fraud Alert: Fake Bakkt Website is Seeking Funds|org=Fortune|date=February 25, 2019}}</ref>
 
 
 
 
 
  
=== Bitcoin retail payments ===
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Bakkt established Bakkt Trust Company which received a charter from the New York State Department of Financial Services (NYDFS) on August 16, 2019. The NYDFS "has authorized Bakkt to provide custody services for bitcoin in conjunction with the launch of physically delivered bitcoin futures contracts. Bakkt will serve institutional customers; its bitcoin futures contracts will be listed for trading on Intercontinental Exchange (ICE) Futures US and cleared through ICE Clear US."<ref>{{cite web|url=https://www.dfs.ny.gov/reports_and_publications/press_releases/pr1908161|name=FINANCIAL SERVICES SUPERINTENDENT LINDA A. LACEWELL ANNOUNCES DFS GRANTS CHARTER TO BAKKT|org=New York Department of Financial Services|date=September 12, 2019}}</ref> Bakkt refers to this service as Bakkt Warehouse.
  
In its initial statements Bakkt said that it will primarily function as a payment platform. The company said that it had has been working with retailers such as Starbucks to enable customers to make low-volume transactions using bitcoin.
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According to a September 9, 2019 Tweet from Bakkt, "Bitcoin deposited at our Warehouse is protected by a $125 million insurance policy."<ref>{{cite web|url=https://twitter.com/Bakkt/status/1171040208105758720|name=Twitter|org=Twitter|date=September 13, 2019}}</ref>
  
=== Bitcoin futures ===
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Bakkt's license from the New York Department of Financial Services was later expanded to allow it to provide services to "institutional" clients, according to a blog post by Bakkt COO Adam White on November 11, 2019.<ref>{{cite web|url=https://medium.com/bakkt-blog/raising-the-bar-announcing-bakkt-institutional-custody-ed5e2ad0da9a|name=Raising the Bar: Announcing Bakkt Institutional Custody|org=Medium|date=November 11, 2019}}</ref> On November 19, [[Galaxy Digital]] announced that it would use Bakkt as a custodian for its two new bitcoin investment funds.<ref>{{cite web|url=https://www.prnewswire.com/news-releases/galaxy-digital-launches-bitcoin-funds-300960254.html|name=Galaxy Digital Launches Bitcoin Funds|org=PR Newswire|date=November 19, 2019}}</ref>
  
Bakkt will allow users to engage in cryptocurrency trading through bitcoin futures contracts. On June 13, 2019, chief operating officer Adam White announced in a blog post that Bakkt would initiate user acceptance testing on July 22 for its upcoming monthly and one-day futures contracts. The deliverable contracts will be for one bitcoin. A launch date for trading futures was not disclosed.<ref>{{cite web|url=https://www.coindesk.com/bakkt-reveals-bitcoin-futures-contract-details-ahead-of-july-test-date?utm_source=BlockchainBites&utm_medium=Email&utm_campaign=2019-06-13|name=Bakkt Reveals Bitcoin Futures Contract Details Ahead of July Test Date|org=CoinDesk|date=June 13, 2019}}</ref>
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=== "Bakkt futures" ===
  
In addition to offering warm wallets for users to store their bitcoins, the company plans to offer insurance as well, should their wallets get hacked.
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On August 16, 2019, Loeffler announced on Bakkt's blog that ICE Futures US's physically-delivered bitcoin futures, commonly referred to as "Bakkt futures,"  would launch trading on September 23, 2019.<ref>{{cite web|url=https://medium.com/bakkt-blog/cleared-to-launch-8dfc3e6f9ed0|name=Cleared to Launch|org=Bakkt Blog|date=August 16, 2019}}</ref> Bakkt Warehouse executes the final deliveries on ICE Futures US's daily and monthly bitcoin futures. Priced in U.S. dollars, each futures contract is for one bitcoin. After the end of trading in a futures contract, ICE Clear US, which clears the futures contracts, matches buyers and sellers with open positions and provides delivery instructions to Bakkt. The market participants who are the beneficial owners of those positions must have accounts at Bakkt in order to receive or pay bitcoin.<ref>{{cite web|url=https://www.cftc.gov/sites/default/files/filings/ptc/19/05/ptc051319iceusdcm001.pdf|name=Product Certification|org=Commodity Futures Trading Commission|date=September 13, 2019}}</ref>
 
 
=== Custody ===
 
  
The company's custodial service, Bakkt Warehouse, is a qualified digital asset custodian. It began accepting customer deposits and withdrawals of bitcoin on September 6, 2019, as announced on August 28.<ref>{{cite web|url=https://cointelegraph.com/news/bakkt-warehouse-launches-deposits-and-withdrawals-as-planned|name=Bakkt Warehouse Launches Deposits and Withdrawals as Planned|org=Cointelegraph|date=September 6, 2019}}</ref>
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On September 23, 2019, Bakkt futures launched.<ref>{{cite web|url=https://www.coindesk.com/bakkt-is-finally-launching-its-bitcoin-futures-today-heres-what-to-expect|name=Bakkt Is Finally Launching Its Bitcoin Futures Today. Here’s What to Expect|org=CoinDesk|date=September 19, 2019}}</ref><ref>{{cite web|url=https://www.wsj.com/articles/nyse-owner-to-launch-long-awaited-bitcoin-futures-11569153649|name=NYSE Owner Launches Long-Awaited Bitcoin Futures|org=The Wall Street Journal|date=September 23, 2019}}</ref> Bakkt futures initially saw low daily trading volumes. In its first week of trading, only 623 bitcoin futures contracts - each of which represents a single bitcoin - were traded, amounting to just $5 million worth of the asset. Dave Weisberger, CEO of [[CoinRoutes]], said that it was too early to write off Bakkt, because it takes time for traders to migrate between platforms, saying, "these things tend to develop slowly."<ref>{{cite web|url=https://www.coindesk.com/trading-volume-for-bakkts-bitcoin-futures-totaled-just-5-million-in-first-week|name=Trading Volume for Bakkt’s Bitcoin Futures Hit Just $5 Million in First Week|org=Coindesk|date=October 2, 2019}}</ref>In October, ICE filed three certifications with the CFTC for programs to enhance trading volumes: liquidity provider program, market maker program and delivery provider program. Neither the incentives provided by the exchange nor the requirements on traders to qualify for payments were made public.<ref>{{cite web|url=https://sirt.cftc.gov/sirt/sirt.aspx?Topic=TradingOrganizationRules|name=Trading Organization Rules|org=Commodity Futures Trading Commission|date=November 11, 2019}}</ref> ICE's trading volume in its physically-settled monthly bitcoin futures contracts spiked, rising from the futures contract equivalent of $690,000 on October 22 to the futures contract equivalent of $4.81 million on October 23.<ref>{{cite web|url=https://www.theblockcrypto.com/linked/44447/bakkts-monthly-bitcoin-futures-hit-nearly-5m-in-trading-volume|name=Bakkt’s monthly bitcoin futures hit nearly $5M in trading volume|org=The Block Crypto|date=October 24, 2019}}</ref> The contract volume hit a record high to date of 1,756 contracts on November 8, 2019.<ref>{{cite web|url=https://www.theice.com/marketdata/reports/12|name=Report Center|org=Intercontinental Exchange|date=November 11, 2019}}</ref>  
  
== History ==  
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ICE launched options on its Bakkt futures on December 9, 2019. The European-style options expire two days prior to the last trading day of the futures contract.<ref>{{cite web|url=https://www.coindesk.com/bakkt-goes-live-with-options-cash-settled-futures-products|name=Bakkt Goes Live With Options, Cash-Settled Futures Products|org=CoinDesk|date=February 7, 2020}}</ref> Bakkt announced that same day that ICE Futures Singapore, an electronic futures market based in Singapore which operates separately from ICE Futures US, had launched trading in cash settled bitcoin futures based on ICE Futures US settlement prices.<ref>{{cite web|url=https://medium.com/bakkt-blog/expanding-the-bakkt-bitcoin-product-complex-68000faea6b3|name=Expanding the Bakkt Bitcoin Product Complex|org=Medium|date=February 7, 2020}}</ref>   
  
In August 2018, ICE announced that they had begun creating a new company called Bakkt, which would aim to provide a federally-regulated market for [[bitcoin]] and other [[digital assets]].<ref>{{cite web|url=https://in.reuters.com/article/us-ice-cryptocurrency-bakkt/nyse-owner-ice-to-form-new-company-for-digital-assets-idINKBN1KO1QN|name=NYSE-owner ICE to form new company for digital assets|org=Reuters|date=August 3, 2018}}</ref> The company has said that it was working with a group of organizations including [http://www.marketswiki.com/wiki/The_Boston_Consulting_Group Boston Consulting Group], Microsoft, and Starbucks, to create an integrated platform that enables consumers and institutions to buy, sell, store and spend bitcoin on a global network.<ref>{{cite web|url=http://fortune.com/longform/nyse-owner-bitcoin-exchange-startup/|name=The NYSE's Owner Wants to Bring Bitcoin to Your 401(k). Are Crypto Credit Cards Next?|org=Fortune|date=August 3, 2018}}</ref>
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=== Bakkt app ===
  
In October 2018, Adam White, the "fifth employee" of [[Coinbase]], announced he was leaving the company. Less than a week later, it was announced that White would be serving as the COO of Bakkt.<ref>{{cite web|url=https://www.theblockcrypto.com/2018/10/11/coinbases-adam-white-is-joining-bakkt-as-its-coo/|name=Coinbase’s Adam White is joining Bakkt as its COO|org=The Block|date=October 12, 2018}}</ref>  
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Bakkt Chief Product Officer Mike Blandina wrote in a blog post on October 28 that the company would introduce a consumer app in 2020 that would allow customers to make easy payments from their mobile devices. The first retailer to allow its customers to use the app for purchases will be Starbucks.<ref>{{cite web|url=https://medium.com/bakkt-blog/unlocking-the-value-of-digital-assets-bdda43214720|name=Unlocking the value of digital assets|org=Medium|date=October 29, 2019}}</ref>  
  
The launch date for the Bakkt Bitcoin Daily Futures Contract was originally set for December 12, 2018. In November 2018, ICE announced that the launch of Bakkt would be delayed so that the company could secure "warm wallet insurance" for Bakkt's infrastructure.<ref>{{cite web|url=https://www.forbes.com/sites/rebeccacampbell1/2018/11/21/ice-postpones-bakkts-bitcoin-futures-launch-to-january-2019/#150ed8ec2e27|name=ICE Postpones Bakkt's Bitcoin Futures Launch To January 2019|org=Forbes|date=November 21, 2018}}</ref> According to Bakkt CEO [[Kelly Loeffler]], the company also hopes to help develop the cryptocurrency market infrastructure by building Bakkt off of existing futures market practices. Loeffler said that ICE intends to design Bakkt to function as a regulated futures market, rather than an unregulated cryptocurrency [[exchange]].<ref>{{cite web|url=https://cryptonewsreview.com/bakkt-ceo-explains-how-it-will-build-on-existing-futures-infrastructure/|name=Bakkt CEO explains how it will build on existing futures infrastructure|org=Crypto News Review|date=September 21, 2018}}</ref>
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=== Loyalty points platform ===
  
In March 2019, the Wall Street Journal reported that Bakkt's launch would be delayed further due to disagreements with the CFTC on how to regulate the platform. The discussion includes possible alternative ways for Bakkt to settle its bitcoin futures contracts in a way that will be regulatable under existing laws. An ICE spokesperson said that ICE was "working through the regulatory review process, and are looking forward to updating the market soon."<ref>{{cite web|url=https://www.wsj.com/articles/bitcoin-futures-launch-hits-regulatory-snag-11553204037?mod=e2tw|name=Bitcoin Futures Launch Hits Regulatory Snag|org=The Wall Street Journal|date=March 22, 2019}}</ref> Around the same time in March, ICE announced that its valuation had reached $740 million following a Series A funding round in which it raised $180 million in 2018.<ref>{{cite web|url=https://cointelegraph.com/news/bakkt-gets-740-million-valuation-but-investors-have-questions-sources-reveal|name=Bakkt Gets $740 Million Valuation But Investors Have Questions, Sources Reveal|org=Cointelegraph|date=March 22, 2019}}</ref><ref>{{cite web|url=https://www.theblockcrypto.com/2019/03/21/bakkt-raises-series-a-at-valuation-topping-700-million/|name=Bakkt raises Series A at valuation topping $700 million|org=The Block|date=March 22, 2019}}</ref> The investors included ICE, Boston Consulting Group, [[Galaxy Digital]], Goldfinch Partners, Alan Howard, Horizons Ventures, and Pantera Capital.<ref>{{cite web|url=https://cointelegraph.com/news/nyse-operators-crypto-platform-bakkt-completes-1825-million-funding-round|name=NYSE Operator’s Crypto Platform Bakkt Completes $182.5 Million Funding Round|org=Cointelegraph|date=March 22, 2019}}</ref>
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In February 2020, ICE announced the acquisition of Bridge2 Solutions, a company that manages loyalty and rewards points platforms for numerous companies. ICE said Bakkt would acquire Bridge2 Solutions from ICE after Bakkt had completed its Series B fundraising later in the first quarter of 2020.<ref>{{cite web|url=https://ir.theice.com/press/press-releases/all-categories/2020/02-05-2020-141840490|name=INTERCONTINENTAL EXCHANGE ANNOUNCES AGREEMENT TO ACQUIRE LEADING LOYALTY PROGRAM PROVIDER BRIDGE2 SOLUTIONS|org=Intercontinental Exchange|date=February 7, 2020}}</ref>  
  
According to a document provided to ICE's technology and operations group and leaked to the press in July 2019, ICE was planning a third-quarter launch of trading in its daily and monthly deliverable bitcoin futures contracts. Approvals for its clearing arrangements from the CFTC and the New York State Department of Finance were still pending at the time that the document became public.<ref>{{cite web|url=https://www.altcoinbuzz.io/crypto-news/product-release/bakkt-reportedly-plans-to-launch-bitcoin-futures-exchange-in-q3/|name=Bakkt Reportedly Plans to Launch Bitcoin Futures Exchange in Q3|org=Altcoin Buzz|date=July 29, 2019}}</ref>
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Bridge2 plans to build an app that would take advantage of its existing network of merchants by allowing those merchants to opt into plugging their payment processes directly into the Bakkt app instead of going through financial institutions to process payments. Bakkt would charge a fee, ''Fortune'' reported, but it would be lower than the 2.5 percent interchange fee charged by most banks. The Bridge2-developed app would also allow users to convert their unused rewards and loyalty points from the platforms Bridge2 already manages into cash or bitcoin.<ref>{{cite web|url=https://fortune.com/2020/02/05/bakkt-rewards-points-bitcoin-cash-wallet/|name=Bakkt aims to turn your rewards points into a wallet you can spend anywhere|org=Fortune|date=February 5, 2020}}</ref><ref>{{cite web|url=https://www.theblockcrypto.com/post/55022/bakkt-set-to-acquire-loyalty-program-provider-bridge2-solutions|name=Bakkt set to acquire loyalty program provider Bridge2 Solutions|org=The Block|date=February 5, 2020}}</ref>
  
On August 16, 2019, Loeffler announced on Bakkt's blog that Bakkt's physically-delivered bitcoin futures and custody services would launch on September 23, 2019.<ref>{{cite web|url=https://medium.com/bakkt-blog/cleared-to-launch-8dfc3e6f9ed0|name=Cleared to Launch|org=Bakkt Blog|date=August 16, 2019}}</ref> On September 6, 2019, Bakkt's custody service, Bakkt Warehouse, began accepting customer deposits and withdrawals of bitcoin.<ref>{{cite web|url=https://cointelegraph.com/news/bakkt-warehouse-launches-deposits-and-withdrawals-as-planned|name=Bakkt Warehouse Launches Deposits and Withdrawals as Planned|org=Cointelegraph|date=September 6, 2019}}</ref>
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Blandina published a blog post on March 16, 2020 saying that Bakkt had completed its Series B fund raise of $300 million dollars. While the blog post provided little in detailed financial information, Blandina revealed that the investors were ICE, M12 (Microsoft Ventures), PayU, Boston Consulting Group, Goldfinch Partners, CMT Digital and Pantera Capital, all of which were among the original investors. Blandina implied that ICE had transferred Bridge2 solutions to Bakkt, as was originally planned. Bakkt has 350 employees according to the blog post. ICE did not reveal the price it paid for Bridge2 Solutions nor the value at which it transferred the asset to Bakkt.<ref>{{cite web|url=https://medium.com/bakkt-blog/bakkt-completes-300-million-series-b-financing-a072ff029135|name=Bakkt Completes $300 Million Series B Financing|org=Medium|date=March 17, 2020.}}</ref> Crunchbase, an online service which tracks investment in technology-based startups, reports that Bridge2 Solutions had raised $77 million in three rounds prior to the sale of the company to ICE.<ref>{{cite web|url=https://www.crunchbase.com/organization/bridge2-solutions#section-lists-featuring-this-company|name=Bridge2 Solutions|org=Crunchbase|date=March 17, 2020}}</ref>
  
== Key People ==
+
Bakkt's president Adam White tweeted on March 16, 2020, that Bakkt payments had been integrated into the Starbucks app.<ref>{{cite web|url=https://twitter.com/WhiteAdamL/status/1239606993909841923|name=@WhiteAdamL|org=Twitter|date=March 17, 2020}}</ref> 
*[[Kelly Loeffler]], CEO
 
*[[Adam White]], COO
 
*Mike Blandina, Chief Product Officer
 
  
 +
== Key people ==
 +
*[[Kelly Loeffler]], founder
 +
*[[Adam White]], President
 +
*David Clifton, interim CEO
 
== References ==
 
== References ==
 
<references />
 
<references />

Latest revision as of 17:18, 6 May 2020

Bakkt
Bakkt.jpg
Founded 2018
Headquarters Atlanta, Georgia
Key People David Clifton, interim CEO; Adam White, President; Nicholas Cabrera, Chief Product Officer; Matthew Johnson, CTO
Employees 10 - 50
Products Cryptocurrency custody
Twitter @Bakkt
LinkedIn Profile
Facebook bakktapp
Website Bakkt Home
Blog Bakkt Blog

Bakkt is a digital assets custody service created by and affilated with Intercontinental Exchange (ICE).[1]

Overview

Bakkt's formation was announced by ICE on August 3, 2018. The company named Microsoft and Starbucks as partners.[2]

Bakkt said at the time that ICE Futures US would launch unmargined deliverable futures trading in November 2018.[3] In a company blog post dated November 20, 2018, however, the company said that the launch of futures trading was delayed until January 24, 2019, as Bakkt continued to work with the U.S. Commodity Futures Trading Commission to gain its approval.[4] According to a Wall Street Journal article in March 2019, Bakkt, whose operations were held in abeyance at the time, lacked CFTC approval for its plans to handle customer funds, including those denominated in cryptocurrencies.[5]

Bakkt announced that it had received investments of $182.5 million on December 31, 2018. The twelve investors included ICE, Boston Consulting Group, Galaxy Digital, Goldfinch Partners, Alan Howard, Horizons Ventures, Microsoft's venture funding arm and Pantera Capital. Starbucks was not mentioned.[6] In the following February, leveraging Bakkt's fame an unidentified individual sent emails trying to attract potential investors for a second round of investments in Bakkt in a blatant scam. The emails asked recipients to register names, email addresses and wallet addresses at bakktplatform.io.[7]

Kelly Loeffler, spouse of ICE CEO Jeffrey Sprecher, was the first CEO of Bakkt. In October 2018, Bakkt announced that Adam White, who was the fifth employee hired by Coinbase and now the second hired by Bakkt, would join as COO.[8] In April 2019, Bakkt announced that it had hired PayPal and Google veteran Mike Blandina as Chief Product Officer.[9] In June 2019, Bakkt brought on Chris Petersen, a former payments product strategist from Google, to help the firm launch its mobile app-based wallet, dubbed Bakkt Pay.[10]

Bakkt announced its five-member board of directors on March 29, 2019. The members include Akshay Naheta, managing partner at Softbank, Sean Collins, managing partner at Goldfinch Partners, Kelly Loeffler, Jeff Sprecher, and Tom Noonan, member of the ICE board of directors who will also serve as chairman of the Bakkt board.[11]

ICE announced on December 4, 2019 that Loeffler had been appointed to the U.S. Senate to complete the remaining year of retiring Republican Georgia Senator Johnny Isakson's term.[12]

On December 23, 2019, Bakkt announced that ICE had appointed Blandina as CEO and Adam White as president of the company.[13] Nicholas Cabrera became the new chief product officer.[14]

In April 2020, Bakkt announced that Blandina was leaving to work at JPMorgan. Bakkt appointed David Clifton as interim chief executive officer.[15]

Services

Custody

Bakkt established Bakkt Trust Company which received a charter from the New York State Department of Financial Services (NYDFS) on August 16, 2019. The NYDFS "has authorized Bakkt to provide custody services for bitcoin in conjunction with the launch of physically delivered bitcoin futures contracts. Bakkt will serve institutional customers; its bitcoin futures contracts will be listed for trading on Intercontinental Exchange (ICE) Futures US and cleared through ICE Clear US."[16] Bakkt refers to this service as Bakkt Warehouse.

According to a September 9, 2019 Tweet from Bakkt, "Bitcoin deposited at our Warehouse is protected by a $125 million insurance policy."[17]

Bakkt's license from the New York Department of Financial Services was later expanded to allow it to provide services to "institutional" clients, according to a blog post by Bakkt COO Adam White on November 11, 2019.[18] On November 19, Galaxy Digital announced that it would use Bakkt as a custodian for its two new bitcoin investment funds.[19]

"Bakkt futures"

On August 16, 2019, Loeffler announced on Bakkt's blog that ICE Futures US's physically-delivered bitcoin futures, commonly referred to as "Bakkt futures," would launch trading on September 23, 2019.[20] Bakkt Warehouse executes the final deliveries on ICE Futures US's daily and monthly bitcoin futures. Priced in U.S. dollars, each futures contract is for one bitcoin. After the end of trading in a futures contract, ICE Clear US, which clears the futures contracts, matches buyers and sellers with open positions and provides delivery instructions to Bakkt. The market participants who are the beneficial owners of those positions must have accounts at Bakkt in order to receive or pay bitcoin.[21]

On September 23, 2019, Bakkt futures launched.[22][23] Bakkt futures initially saw low daily trading volumes. In its first week of trading, only 623 bitcoin futures contracts - each of which represents a single bitcoin - were traded, amounting to just $5 million worth of the asset. Dave Weisberger, CEO of CoinRoutes, said that it was too early to write off Bakkt, because it takes time for traders to migrate between platforms, saying, "these things tend to develop slowly."[24]In October, ICE filed three certifications with the CFTC for programs to enhance trading volumes: liquidity provider program, market maker program and delivery provider program. Neither the incentives provided by the exchange nor the requirements on traders to qualify for payments were made public.[25] ICE's trading volume in its physically-settled monthly bitcoin futures contracts spiked, rising from the futures contract equivalent of $690,000 on October 22 to the futures contract equivalent of $4.81 million on October 23.[26] The contract volume hit a record high to date of 1,756 contracts on November 8, 2019.[27]

ICE launched options on its Bakkt futures on December 9, 2019. The European-style options expire two days prior to the last trading day of the futures contract.[28] Bakkt announced that same day that ICE Futures Singapore, an electronic futures market based in Singapore which operates separately from ICE Futures US, had launched trading in cash settled bitcoin futures based on ICE Futures US settlement prices.[29]

Bakkt app

Bakkt Chief Product Officer Mike Blandina wrote in a blog post on October 28 that the company would introduce a consumer app in 2020 that would allow customers to make easy payments from their mobile devices. The first retailer to allow its customers to use the app for purchases will be Starbucks.[30]

Loyalty points platform

In February 2020, ICE announced the acquisition of Bridge2 Solutions, a company that manages loyalty and rewards points platforms for numerous companies. ICE said Bakkt would acquire Bridge2 Solutions from ICE after Bakkt had completed its Series B fundraising later in the first quarter of 2020.[31]

Bridge2 plans to build an app that would take advantage of its existing network of merchants by allowing those merchants to opt into plugging their payment processes directly into the Bakkt app instead of going through financial institutions to process payments. Bakkt would charge a fee, Fortune reported, but it would be lower than the 2.5 percent interchange fee charged by most banks. The Bridge2-developed app would also allow users to convert their unused rewards and loyalty points from the platforms Bridge2 already manages into cash or bitcoin.[32][33]

Blandina published a blog post on March 16, 2020 saying that Bakkt had completed its Series B fund raise of $300 million dollars. While the blog post provided little in detailed financial information, Blandina revealed that the investors were ICE, M12 (Microsoft Ventures), PayU, Boston Consulting Group, Goldfinch Partners, CMT Digital and Pantera Capital, all of which were among the original investors. Blandina implied that ICE had transferred Bridge2 solutions to Bakkt, as was originally planned. Bakkt has 350 employees according to the blog post. ICE did not reveal the price it paid for Bridge2 Solutions nor the value at which it transferred the asset to Bakkt.[34] Crunchbase, an online service which tracks investment in technology-based startups, reports that Bridge2 Solutions had raised $77 million in three rounds prior to the sale of the company to ICE.[35]

Bakkt's president Adam White tweeted on March 16, 2020, that Bakkt payments had been integrated into the Starbucks app.[36]

Key people

References

  1. Blog. Bakkt.
  2. Intercontinental Exchange Announces Bakkt, a Global Platform and Ecosystem for Digital Assets. Business Wire.
  3. New Starbucks partnership with Microsoft allows customers to pay for Frappuccinos with bitcoin. CNBC.
  4. Launch update + reader FAQs. Bakkt.
  5. Bitcoin Futures Launch Hits Regulatory Snag. The Wall Street Journal.
  6. NYSE Operator’s Crypto Platform Bakkt Completes $182.5 Million Funding Round. Cointelegraph.
  7. Fraud Alert: Fake Bakkt Website is Seeking Funds. Fortune.
  8. Coinbase’s Adam White is joining Bakkt as its COO. The Block.
  9. Bitcoin Futures Exchange Bakkt Hires Mike Blandina As Chief Product Officer. BlockTribune.
  10. Bakkt brings on Google payments expert as it builds its consumer app for spending cryptocurrency. Bakkt.
  11. Bakkt Taps Former IBM and Cisco Exec Tom Noonan to Chair Its Board. CoinDesk.
  12. Press Release. Intercontinental Exchange.
  13. Press Release. Bakkt.
  14. Bakkt by experienced leadership. Bakkt.
  15. REFILE-UPDATE 1-Bakkt boss to leave for JPMorgan - source. Reuters.
  16. FINANCIAL SERVICES SUPERINTENDENT LINDA A. LACEWELL ANNOUNCES DFS GRANTS CHARTER TO BAKKT. New York Department of Financial Services.
  17. Twitter. Twitter.
  18. Raising the Bar: Announcing Bakkt Institutional Custody. Medium.
  19. Galaxy Digital Launches Bitcoin Funds. PR Newswire.
  20. Cleared to Launch. Bakkt Blog.
  21. Product Certification. Commodity Futures Trading Commission.
  22. Bakkt Is Finally Launching Its Bitcoin Futures Today. Here’s What to Expect. CoinDesk.
  23. NYSE Owner Launches Long-Awaited Bitcoin Futures. The Wall Street Journal.
  24. Trading Volume for Bakkt’s Bitcoin Futures Hit Just $5 Million in First Week. Coindesk.
  25. Trading Organization Rules. Commodity Futures Trading Commission.
  26. Bakkt’s monthly bitcoin futures hit nearly $5M in trading volume. The Block Crypto.
  27. Report Center. Intercontinental Exchange.
  28. Bakkt Goes Live With Options, Cash-Settled Futures Products. CoinDesk.
  29. Expanding the Bakkt Bitcoin Product Complex. Medium.
  30. Unlocking the value of digital assets. Medium.
  31. INTERCONTINENTAL EXCHANGE ANNOUNCES AGREEMENT TO ACQUIRE LEADING LOYALTY PROGRAM PROVIDER BRIDGE2 SOLUTIONS. Intercontinental Exchange.
  32. Bakkt aims to turn your rewards points into a wallet you can spend anywhere. Fortune.
  33. Bakkt set to acquire loyalty program provider Bridge2 Solutions. The Block.
  34. Bakkt Completes $300 Million Series B Financing. Medium.
  35. Bridge2 Solutions. Crunchbase.
  36. @WhiteAdamL. Twitter.