Bakkt

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Bakkt
Bakkt.jpg
Founded 2018
Headquarters Atlanta, Georgia
Key People Kelly Loeffler, CEO; Adam White, COO; Mike Blandina, Chief Product Officer
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] Its formation was announced by ICE on August 3, 2018. The company named Microsoft and Starbucks as partners.[2]

Bakkt announced that it 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]

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, Bakkt's CEO, Jeff Sprecher, ICE CEO and chairman, and Tom Noonan, member of the ICE board of Directors who will also serve as chairman of the Bakkt board.[7]

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..[8] In April 2019, Bakkt announced that it had hired former PayPal and Google executive Mike Blandina as Chief Product Officer.[9]

Custody

Bakkt established Bakkt Trust Company which on August 16, 2019 received a charter from the New York State Department of Financial Services. Bakkt was "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."[10]

Bakkt provides "warm" wallet insurance for its customers. It may also offer services for 401(k) accounts and IRAs based on bitcoin.[11]


In June 2019, Bakkt announced that it had brought on Chris Petersen, a former payments product strategist from Google, to help the firm launch its mobile app-based wallet, dubbed Bakkt Pay.[12]

Fake Bakkt Investment Scam

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.[13]


Bitcoin retail payments

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.

Bitcoin futures

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.[14]

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.

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.[15]

History

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.[16] The company has said that it was working with a group of organizations including 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.[17]

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.[18]

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.[19] 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.[20]

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."[21] 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.[22][23] The investors included ICE, Boston Consulting Group, Galaxy Digital, Goldfinch Partners, Alan Howard, Horizons Ventures, and Pantera Capital.[24]

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.[25]

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.[26] On September 6, 2019, Bakkt's custody service, Bakkt Warehouse, began accepting customer deposits and withdrawals of bitcoin.[27]

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. Bakkt Taps Former IBM and Cisco Exec Tom Noonan to Chair Its Board. CoinDesk.
  8. Coinbase’s Adam White is joining Bakkt as its COO. The Block.
  9. Fraud Alert: Fake Bakkt Website is Seeking Funds. The Block.
  10. FINANCIAL SERVICES SUPERINTENDENT LINDA A. LACEWELL ANNOUNCES DFS GRANTS CHARTER TO BAKKT. New York Department of Financial Services.
  11. ICE Postpones Bakkt's Bitcoin Futures Launch To January 2019. Forbes.
  12. Bakkt brings on Google payments expert as it builds its consumer app for spending cryptocurrency. Bakkt.
  13. Fraud Alert: Fake Bakkt Website is Seeking Funds. Fortune.
  14. Bakkt Reveals Bitcoin Futures Contract Details Ahead of July Test Date. CoinDesk.
  15. Bakkt Warehouse Launches Deposits and Withdrawals as Planned. Cointelegraph.
  16. NYSE-owner ICE to form new company for digital assets. Reuters.
  17. The NYSE's Owner Wants to Bring Bitcoin to Your 401(k). Are Crypto Credit Cards Next?. Fortune.
  18. Coinbase’s Adam White is joining Bakkt as its COO. The Block.
  19. ICE Postpones Bakkt's Bitcoin Futures Launch To January 2019. Forbes.
  20. Bakkt CEO explains how it will build on existing futures infrastructure. Crypto News Review.
  21. Bitcoin Futures Launch Hits Regulatory Snag. The Wall Street Journal.
  22. Bakkt Gets $740 Million Valuation But Investors Have Questions, Sources Reveal. Cointelegraph.
  23. Bakkt raises Series A at valuation topping $700 million. The Block.
  24. NYSE Operator’s Crypto Platform Bakkt Completes $182.5 Million Funding Round. Cointelegraph.
  25. Bakkt Reportedly Plans to Launch Bitcoin Futures Exchange in Q3. Altcoin Buzz.
  26. Cleared to Launch. Bakkt Blog.
  27. Bakkt Warehouse Launches Deposits and Withdrawals as Planned. Cointelegraph.