Bakkt, the widely anticipated crypto trading platform from Intercontinental Exchange, parent company of the New York Stock Exchange, is still on pause, despite hopes that it will usher in a significant wave of institutional investors, from high-net wealth individuals to hedge funds to endowments.
The startup is currently under review by the Commodity Futures Trading Commission (CFTC) as it seeks confirmation to launch physically-settled Bitcoin futures.
According to a new Bloomberg report, unnamed sources say that the regulator’s primary reservation is Bakkt’s ability to provide cryptocurrency custody services for its clients. To meet the regulator’s requirements and to become fully compliant, Bakkt would need to satisfy the Commission’s rules regarding clearinghouses. Those rules stipulate that customers’ funds are deposited at a bank or a trust company. Bakkt is neither.
“To placate the agency, ICE is considering seeking a license from New York financial regulators that would permit Bakkt itself to hold custody of customers’ tokens, said three of the people, who asked not to be named because the discussions aren’t public.
Should ICE secure a state license it would still need sign-off from the CFTC on the broader Bakkt project.”
Bakkt was originally hoping to launch at the end of last year. But ongoing scrutiny by regulators has pushed the launch date several times.
Bakkt has hinted that a release date is approaching.