ICE-backed startup Bakkt is moving ahead with its plan to create the first federally regulated cryptocurrency marketplace, which is expected to launch in the coming months, according to its CEO Kelly Loeffler.
Loeffler stated on her official Medium blog that Bakkt would start user acceptance testing (UAT) for futures and custody in July, a strong indication on how she’s confident to settle the remaining issues with the US regulators. From the Bakkt’s perspective, however, this action only aims to ensure providing prospective clients with sufficient time to onboard and test its trading and custody models.
Loeffler, who is married to ICE CEO Jeff Sprecher, further clarifies that the new Bitcoin offering involves two futures contracts; daily future contract, which will enable customers to transact in a same-day market, and a monthly bitcoin futures contract.
The amended terms and conditions of ICE’s bitcoin contracts were announced in two separate submissions to the CFTC. Compared to previous filings, the owner of the New York Stock Exchange has updated trading hours, settlement procedures, trades limits, no cancellation ranges and interval price limits.
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And in order to placate the CFTC, the physical delivery and storage of bitcoin will be provided by Bakkt’s qualified custodian. This was the issue that has made the agency most concerned about the NYSE owner’s product as crypto assets have been vulnerable to the risks of possible theft and manipulation.
New hires and “skin in the game”
Bakkt CEO also added that the ICE-owned startup would pay $35 million to contribute into arrangements of hedging against clearing risks. “This puts our own “skin in the game” and aligns our interests for market integrity and safety with market participants,” said Loeffler.
Earlier last month, Bakkt acquired Digital Asset Custody Company (DACC), which provides cryptocurrency custody solution for institutional investors and token issuers holding digital assets. The takeover should help Bakkt secure the NY regulator’s approval to operate as a so-called ‘qualified custodian,’ which permits the company itself to hold custody of customers’ tokens. In addition, Bakkt also announced it has partnered with BNY Mellon to offer geographically-distributed storage of private keys secured by the bank.
In the meantime, Bakkt continues to bring on new talents to build out its crypto platform, this time onboarding payment industry veteran Marc D’Annunzio as a general counsel. In his new role, the former executive at law firm Alston & Bird will lead legal, regulatory, compliance and governance matters at Bakkt.