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Bakkt confirms September launch date after getting green light from regulators

by Isabel Woodford

August 16, 2019, 11:18AM EDT  ·  3 min read

Quick Take

  • Bakkt says it will launch its physically-delivered bitcoin futures product in September – months after its initial planned deadline
  • The upcoming exchange has received a trust charter from New York regulators, meaning it will be a qualified custodian and can store the bitcoin underpinning its futures contract

by Isabel Woodford

August 16, 2019, 11:18AM EDT  ·  3 min read

Bakkt has announced it will debut its long-awaited bitcoin futures and warehouse product to institutional clients on September 23, a welcomed update after the firm announced a series of delays last year.

Bakkt, a venture that’s backed by Intercontinental Exchange (ICE), began testing its bitcoin futures contracts in July but until now has been unable to fully launch because of the final roadblock of getting a trust license from the New York Department of Financial Services (NYDFS).

This license will allow it to compliantly build its own custody solution for the futures contracts, dubbed the Bakkt Warehouse. For good measure, Bakkt also decided to seek regulatory approval from the U.S. Commodity Futures Trading Commission (CFTC).  

“Our contracts have already received the green light from the CFTC through the self-certification process and user acceptance testing has begun. With approval by the New York State Department of Financial Services to create Bakkt Trust Company, a qualified custodian, the Bakkt Warehouse will custody bitcoin for physically delivered futures,” Bakkt CEO Kelly Loeffler announced in a Medium post Friday.

As reported by The Block last month, Bakkt has been gearing up for a Q3 launch date for its two products; a daily settlement bitcoin future that allows customers to trade in a same-day market, and a monthly-futures contract.

Bakkt was originally meant to launch its physically-delivered future products on December 12th 2018, and then postponed the launch again in January 2019.

The exchange raised $182.5 million last year, pitching a futures trading platform geared at institutions. The yet-to-launch crypto venue was being valued at around $740 million following its Series A funding round, The Block reported earlier this year.

Most recently, Bakkt acquired certain assets of Rosenthal Collins Group (RCG), an independent futures commission merchant, bringing additional members onto its ever-growing team. Its leadership includes the former head of Coinbase’s institutional business Adam White, who is the firm’s chief operating officer.

Bakkt is not the only firm to have faced regulatory hiccups in the race to launch physically-delivered bitcoin futures in the US. The space was rocked earlier this month by the news that cryptocurrency derivatives provider LedgerX had not in fact beaten Bakkt to the mark, despite tweeting that it had launched its own physically delivered futures. Several outlets, including The Block, had reported that LedgerX had launched its retail trading platform supporting the futures contracts. However, the primary U.S. derivatives regulator later told The Block that wouldn’t be the case since LedgerX still lacks approval to do so. 

Exchanges ErisX and SeedCX are also hot on Bakkt’s heels, having scheduled the launch of their own futures products for later this year. Fidelity Digital Assets also reportedly applied to NYDFS for a Trust license last month, which would allow it to operate its custody business for digital assets in New York.

Bakkt’s goal now will be to sign up clients for its launch. However, as reported by The Block, some of their largest prospective clients still don’t have permission to trade physically-delivered futures contracts.