Bakkt Gets Clearance From Regulators To Launch Bitcoin Futures

Bakkt announced today that they have clearance from the New York State Department of Financial Services to launch Bitcoin futures. In partnership with ICE Futures U.S. and ICE Clear US, On 23rd Sept 2019, Bakkt will launch physically-delivered daily and monthly bitcoin futures contract.

“With the comprehensive regulatory review and approval of Bakkt Trust Company complete, we are pleased to serve as a qualified custodian of bitcoin for physically delivered futures,” said Adam White, Chief Operating Officer of Bakkt.

“This approval demonstrates New York’s competitiveness as a hub of innovation and leadership in emerging technologies, ” said Linda A. Lacewell, New York Superintendent of Financial Services.

Regulatory clarity and security for Institutional customers

• With clearance to launch from the New York State Department of Financial Services, Bakkt’s bitcoin futures will be exchange-traded on ICE Futures U.S. and cleared on ICE Clear U.S., which are federally regulated by the CFTC.

• The contracts will be physically-delivered in Bakkt Warehouse. It comprises of both online (“warm”) and offline, air-gapped (“cold”) digital asset storage.
  
  To further protect the customers, [inlinetweet]Bakkt’s warm and cold wallets are covered by a $125,000,000 insurance policy from a leading global syndicate.[/inlinetweet] In addition, Bakkt is working with one of the largest custody banks, BNY Mellon, as part of its safekeeping process. 

This offers customers regulatory clarity and security in a cryptocurrency market which is underserved by institutional-grade infrastructure.

Early this year, Bitwise provided a study report which highlights that nearly 95% of trading volume in Bitcoin is fake. Most of this trading volume is faked by unregulated exchanges, however, these fake volume does not influence Bitcoin price discovery in the real, regulated bitcoin spot markets.

Given the significant manipulation in spot market activity, Bakkt’s futures contract (daily and monthly) will not rely on unregulated spot markets for Bitcoin settlement price, thus serving a transparent benchmark for Bitcoin price.

In a blog post, Bakkt CEO Kelly Loeffler wrote,

“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”.