BITCOIN, BLOCKCHAIN

Bitcoin Futures Platform Bakkt ‘Cleared to Launch’

NEW YORK – Bakkt, Intercontinental Exchange’s bitcoin (BTC) futures trading platform, has been “cleared for launch.”

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Kelly Loeffler
Kelly Loeffler

“One year ago, we announced our ambitious vision to bring institutional infrastructure to digital assets with an end-to-end regulated marketplace,” said Bakkt CEO Kelly Loeffler.

“That vision will be realized on September 23 when Bakkt launches custody and physically-delivered daily and monthly bitcoin futures contracts in partnership with ICE Futures U.S. and ICE Clear US.”

The contracts have already received the green light from the Commodity Futures Trading Commission (CFTC) through the self-certification process and user acceptance testing has begun.

With approval by the New York State Department of Financial Services (NYDFS) to create Bakkt Trust Company, a qualified custodian, the Bakkt Warehouse will custody bitcoin for physically delivered futures.

This offers customers unprecedented regulatory clarity and security alongside a regulated, globally accessible exchange in a market underserved by institutional-grade infrastructure.

In recent weeks, Bakkt hosted events in New York and Chicago where they gathered roughly 150 customers, regulators, and market participants to advance the dialogue in the industry, including a fireside chat with CFTC Commissioner Dawn Stump.

In Chicago, the company had a conversation on the regulation of digital assets with SEC Commissioner Hester Peirce.

While much has been said about deficiencies in cryptocurrency markets, the advances being made in the digital asset ecosystem are significant in terms of participants, platforms and applications — not to mention the rapid pace of development that continues through bear and bull markets.

Digital asset markets are global and well-developed, but they have largely been designed to serve retail customers rather than institutional participants.

Bakkt hopes to bridge that gap to access this market and solve for factors that have slowed institutional participation.

“Whether concerns relate to a lack of liquidity, market quality and regulation, or issues with reliability, fees, and operational risks, we are addressing these challenges with a transparent offering,” said Loeffler.

“We’re starting with the introduction of a regulated and secure qualified custodian for bitcoin to support our futures contracts.”

The Bakkt Warehouse, which is part of Bakkt Trust Company, is built using the cyber and physical security protections that support the world’s most actively traded markets, including the NYSE.

In addition, the independent governance and compliance requirements of a qualified custodian mean that the Bakkt Warehouse is designed to meet the highest standards of oversight.

Uniquely, Bakkt bitcoin futures contracts will not rely upon unregulated spot markets for settlement prices, thus serving as a transparent price discovery mechanism for the benchmark price for bitcoin.

The importance of this differentiator is only amplified by reports of significant manipulative spot market activity, and other concerns such as inconsistent anti-money-laundering policies and weak compliance controls.

Bakkt’s bitcoin futures will be exchange-traded on ICE Futures U.S. and cleared on ICE Clear US, which are federally regulated by the CFTC.

Regulated exchanges differ from trading platforms, such as crypto spot markets in many respects, including risk management, compliance and market surveillance.

The Bakkt futures contracts will also be covered by the existing guaranty fund at ICE Clear US, which has an established risk waterfall across multiple commodities markets.

An incremental $35 million is being contributed to the existing guaranty fund with the addition of these new futures contracts.

“We’ve designed the Bakkt Warehouse to provide regulated, secure custody of bitcoin that is protected by $125 million in insurance,” stated Loeffler.

“Providing a trusted ecosystem is our first objective. To do that we are setting a higher standard, including an institutional compliance and anti-money laundering program, settlement prices that are distinct from unregulated spot prices, comprehensive market oversight, a guaranty fund contribution and insurance.”

Looking back to Milton Friedman’s prescient remarks in 1999, just as the internet was taking hold, his clarity about the future of an internet-connected economy was striking:

“The one thing that’s missing, but that will soon be developed, is a reliable e-cash. A method where buying on the Internet you can transfer funds from A to B, without A knowing B or B knowing A.”

It was a provocative, perhaps largely unnoticed remark at the time, but was followed a decade later by the watershed Bitcoin white paper and blockchain.

“Today, we’re helping institutions, consumers, policy makers and regulators engage in this emerging market through a trusted, secure and compliant platform,” said Loeffler.

“We are excited about supporting the future of digital assets at Bakkt. Until our launch on September 23, we’ll continue onboarding and testing with market participants. If you’re interested in trading the Bakkt Bitcoin Daily or Monthly Futures contracts, contact us at sales@bakkt.com. We look forward to continuing our work with market participants to bring more trust, access, opportunity and utility to digital assets.”

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BITCOIN, BLOCKCHAIN

Bakkt to Launch ‘In the Very Near Future’ According to Intercontinental Exchange CEO

NEW YORK – Intercontinental Exchange’s CEO Jeffery Sprecher stated bitcoin (BTC) futures trading platform Bakkt will be launching soon during a quarterly earnings call.

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According to Sprecher, Bakkt is “working to develop a regulated ecosystem that services the evolving needs of [participants] around the world.”

“Subject to final regulatory approvals, we plan to launch our physically settled bitcoin futures in the very near future.”

The project was initially slated for launch in January, but has since faced stiff regulatory roadblocks.

Bakkt’s official launch date has yet to be announced.

Adam White

“THIS IS NO SMALL STEP,” SAID BAKKT COO ADAM WHITE.

“THIS LAUNCH WILL USHER IN A NEW STANDARD FOR ACCESSING CRYPTO MARKETS. COMPARED TO OTHER MARKETS, INSTITUTIONAL PARTICIPATION IN CRYPTO REMAINS CONSTRAINED DUE TO LIMITATIONS LIKE MARKET INFRASTRUCTURE AND REGULATORY CERTAINTY. THIS RESULTS IN LOWER TRADING VOLUMES, LIQUIDITY, AND PRICE TRANSPARENCY THAN MORE ESTABLISHED MARKETS LIKE ICE’S BRENT CRUDE FUTURES CONTRACT, WHICH HAS EARNED GLOBAL TRUST IN SETTING THE WORLD’S PRICE OF CRUDE OIL.”

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BITCOIN, BLOCKCHAIN

Bitcoin Futures Platform Bakkt will Begin Testing July 22

NEW YORK – Bakkt, Intercontinental Exchange’s bitcoin (BTC) futures trading platform, has stated they plan to test its two future contacts on July 22.

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Bakkt’s COO, Adam White, said the platform with “initiate user acceptance testing.”

In a recent blog post, Intercontinental Exchange (ICE) included new details regarding Bakkt’s monthly contact and provided an update regarding contract specifications for their daily contacts.

Both the monthly and daily contracts will have a minimum price fluctuation of $2.50, with each contact containing at least one BTC.

A listing cycle can last as long as 12 months for the monthly contracts and 70 successive contract dates on the daily contracts.

Settlement for both contacts will be at the Bakkt Warehouse.

Customers will receive actual BTC on the contract’s expiration, unlike current BTC future contacts offered by CME Group, which is cash-settled.

According to White, Bakkt hopes “to support the development of trusted infrastructure for securely transacting in the new market for digital assets.”

The project was initially slated for launch in January, but has since faced stiff regulatory roadblocks.

Bakkt’s official launch date has yet to be announced.

Adam White

“This is no small step,” White said.

“This launch will usher in a new standard for accessing crypto markets. Compared to other markets, institutional participation in crypto remains constrained due to limitations like market infrastructure and regulatory certainty. This results in lower trading volumes, liquidity, and price transparency than more established markets like ICE’s Brent Crude futures contract, which has earned global trust in setting the world’s price of crude oil.”

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BITCOIN, BLOCKCHAIN

Bitcoin Futures Platform Bakkt will Begin Testing in July

NEW YORK – Bakkt, Intercontinental Exchange’s bitcoin futures trading platform, has stated they plan to begin testing in early July 2019.

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The company is organizing the first test with ICE Futures U.S. exchange, as well as ICE Clear U.S. clearinghouse.

Kelly Loeffler
Kelly Loeffler

“In conjunction with our exchange and clearing partners at ICE, we’ll be working with our customers over the next several weeks to prepare for user acceptance testing (UAT) for futures and custody, which we expect to start in July,” said bakkt ceo kelly loeffler.

Bakkt is also working with the U.S. Commodity Futures Trading Commission (CFTC) to resolve compliance and federal regulation matters.

In April, the company acquired Digital Asset Custody Company (DACC), a cryptocurrency custodian service company, to operate as a Qualified Custodian for cryptocurrency.

“AS WE LOOK TO SCALE AND SUPPORT CUSTODY OF ADDITIONAL DIGITAL ASSETS, DACC’S NATIVE SUPPORT OF 13 BLOCKCHAINS AND 100+ ASSETS WILL SERVE AS AN IMPORTANT ACCELERATOR, AND WE’RE PLEASED TO WELCOME MATTHEW JOHNSON, ADAM HEALY, AND THE ENTIRE DACC TEAM TO BAKKT.”

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BITCOIN, BLOCKCHAIN

Bakkt Acquires Crypto Custodian Firm DACC, BNY Mellon for Key Storage

NEW YORK – Bakkt, Intercontinental Exchange’s bitcoin futures trading platform, has acquired the Digital Asset Custody Company (DACC) to “continue developing a secure digital asset storage solution.

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Bakkt COO, Adam White, stated DACC “share Bakkt’s security-first mindset,” and provides experience in developing its own established custody solutions.

“As we look to scale and support custody of additional digital assets, DACC’s native support of 13 blockchains and 100+ assets will serve as an important accelerator, and we’re pleased to welcome Matthew Johnson, Adam Healy, and the entire DACC team to Bakkt.”
The amount Bakkt spent on the acquisition was not disclosed.

The company has also acquired BNY Mellon to facilitate a “geographically-distributed” private key storage, according to White.

“Bakkt uses both warm (online) and cold (offline) wallet architecture to secure customer funds. The majority of assets are stored offline in air-gapped cold wallets that are insured with a $100,000,000 policy underwritten by leading global insurance carriers,” stated White.

After being postponed for five months, a recent Bloomberg article stated Intercontinental Exchange (ICE) is turning to the New York Department of Financial Services (NYDFS) to receive a license.

The delays have been placed on cynicism from the Commodity Futures Trading Commission (CFTC), the regulatory body in charge of bitcoin futures.

The CFTC apprehensive take is due to how clients’ tokens will be stored and whether investors have enough safeguards against theft and manipulation.

ICE is hoping a regulatory stamp of approval from the NYDFS will conciliate the CFTC.

However, even with a state license, ICE will still need an endorsement by the CFTC on the Bakkt project.

Spokesmen for ICE and the CFTC declined to comment.

Bakkt hopes to solve two main problems they believe is holding bitcoin back from mainstream adoption; Institutional investors entering the sector, as well as, enabling “consumers and institutions to buy, sell, store and spend digital assets on a seamless global network.”

The project was initially slated for launch in November, but regulatory hurdles have plagued the platform since.

Bakkt CEO Kelly Loeffler stated the company is continuing to work with the CFTC, but they’re “not yet able to provide a launch date.”

Kelly Loeffler
Kelly Loeffler

“While we’re not yet able to provide a launch date, we’re making solid progress in bringing the first physical delivery price discovery contracts for Bitcoin to the U.S., where price formation will occur in federally regulated, transparent markets,” Loeffler said in a Medium post on March 29.

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