The launch of the highly anticipated Bitcoin futures platform Bakkt is facing one more regulatory hurdle.
Bakkt, which is owned by Intercontinental Exchange (ICE), is waiting on the approval of Bakkt Trust Company LLC from the New York Department of Financial Services. The trust will give Bakkt the ability to operate as a qualified custodian and play a crucial role in the company’s plan to physically settle contracts in BTC.
A recent letter from Bakkt details the company’s efforts to gain approval and outlines how the trust will credit customers with the leading cryptocurrency.
“Deliveries under the Bitcoin Contracts will be made through Bakkt Trust Company LLC (the “Warehouse”), which has applied to be licensed as a limited purpose limited liability trust company by the New York State Department of Financial Services. The Bitcoin Contracts require that market participants deposit with the Warehouse the Bitcoin necessary to cover their delivery obligations under short positions in Bitcoin Contracts that go to delivery…
The Warehouse will credit to the appropriate Account Bitcoin transferred by or on behalf of the market participant to the Warehouse. With respect to such Bitcoin, the Warehouse will be recorded as the holder for purposes of the public blockchain or other ledger constituting the ‘external network’ for such Bitcoin, and the Warehouse will in turn credit such Bitcoin to the Account of the market participant on its own books and records.”
Bakkt says ICE Futures U.S. will certify its futures contracts under the rules of and in coordination with the Commodities Futures Trading Commission.
After attending Bakkt’s Institutional Digital Asset Summit in New York, Fundstrat’s Sam Doctor, a market research analyst, said it appears a “critical mass” of institutional adopters is ready to start using the platform on day one.
We think #Bakkt could be a huge catalyst for institutional participation in the #crypto market. Here are our takeaways from the Bakkt institutional summit yesterday at the NYSE… #bitcoin #BTC #ETH @fundstrat @fundstrat_ken pic.twitter.com/lkRylD1P4C
— Sam Doctor (@CryptoSamDoctor) July 19, 2019
Fundstrat recently revealed that Bakkt now aims to launch in the third quarter of this year.