Bakkt Is Planning Q3 Opening as Sources Affirm Plan Is Risky for the Bitcoin Futures Platform
If you follow crypto news, you have probably already heard about Bakkt, the platform created by the Intercontinental Exchange (ICE), which owns the New York Stock Exchange (NYSE), among other relevant enterprises. Now, Bakkt is eyeing a Q3 launch, according to sources who spoke to The Block Crypto.
According to this inside source, the date is set to be publicly announced soon, however, there is still some risk involved in the situation and they launch may be postponed again.
The main obstacle in order to open up the exchange is getting approval from the New York Department of Financial Services. NY is generally deemed as a very harsh regulator and most companies are not able to get the license, which is why this is the last remaining step.
With the approval to create the Bakkt Warehouse, which would let the company operate as a limited-purpose trust firm, Bakkt would have its own custodian for the physically delivered futures that it plans to launch.
Sources affirmed that the futures and the warehouse are two different topics, however, the futures could not be operated without the warehouse. Without it, the company is unable to launch some of the products that are has planned so far.
All the investors are set to get physically settled Bitcoin that will be cleared by ICE in a compliant manner in order to start the platform. This would end up being the first end-to-end regulated platform in which traders could engage with BTC in the national market.
Bakkt’s Plans Are Considered Risky
Despite how close it seems that Bakkt is to close the deal and finally launch its platform, which is being awaited the whole year, there are some issues which might get in the way. Multiple industry sources interviewed by The Block Crypto.
According to these sources, the company is taking too much risk. For instance, the guaranty fund set by the company is considered too small to cover positions. ICE is set to use $35 million USD to start the fund, but this is far from a large sum of money. This was not considered a normal practice and could end causing issues for the company in the long term.
One of the sources, Ricky Li, the co-founder of Altonomy, openly criticized the company for having a fund of at least $400 million in open positions at risk compared to the $35 million guaranty fund.
Fortunately, it seems that the company is acknowledging the issue already and there are plans to raise the sum of the funds in the future, which would help to diminish them. In any case, most sources considered the plan to be “good enough” in order to start the business, they just seemed somewhat concerned about the value. If you want, you can see the whole Bakkt document on Scribd.