Bakkt, the institutional Bitcoin (BTC) trading platform backed by Intercontinental Exchange, has announced on Monday the launch of its custody feature for its entire client base.
The news was shared in a blog post on November 11th by Bakkt, confirming that it had received regulatory approval from the New York Department of Financial Services (NYDFS) to offer custody services to any institution. Prior to this, this feature was only available for those trading its BTC futures.
The news came just weeks after the company said it would begin offering options on top of its existing BTC futures contracts, which in turn came less than a month after the company went live with its long-anticipated physically delivered offerings.
The new service provides is an extension of the company’s Bakkt Warehouse and will offer bitcoin custodial services to institutional investors. At the moment, several companies have signed on as initial customers for Bakkt Warehouse, including Pantera Capital, Galaxy Digital and Tagomi. Other marquee firms are expected to join in the next few weeks.
Following the release, Bakkt COO Adam White has claimed that the company believes that the custodial feature is a critical link in the institutional adoption of bitcoin is custody.
The blog post further noted that:
“Safely storing digital assets demands a comprehensive approach to custody. Institutions and sophisticated investors need more than cutting-edge technology. They require proven infrastructure, robust operational controls, and independent oversight.”
White further added that whilst technology provided the foundation by which the company stored customer funds, “the Bakkt Warehouse employs extensive physical, operational and cybersecurity safeguards too.”
He noted that due to the relationship between Bakkt and Intercontinental Exchange allowed them to uniquely address client needs in the digital asset custody space, including on-premises data centers and dedicated network connectivity between operational sites,that remove the need to rely on third parties.
According to Bakkt, the new tool will employ a range of security and safeguards, such as redundant secondary facilities, geographically-distributed signing operations, as well as independent reporting structures amongst others. The company is currently working with BNY Mellon to support its geographically separated key storage feature.
In addition to that, the company will also protect its systems with 24 hour video monitoring, armed guards, and security operations and incident response teams. The trading platform has also secured its SOC2 certification – a review of its systems by a third-party auditor.
Although a number of other companies are currently developing their own platforms for physically-settled bitcoin futures in the U.S., Bakkt has been the only one to launch so far.
In the meantime, Bakkt has also recently announced its plans to launch a cryptocurrency consumer app and merchant portal – Starbucks – which would launch in the first half of 2020 with Starbucks.
Meanwhile, Bakkt Warehouse is entering a market with a fair amount of competition, including Fidelity Digital Assets, which fully rolled-out its platform in October. Another market competitor is Coinbase Custody, which launched in 2018 and now manages over $7 billion thanks in part to its acquisition of Xapo’s institutional business.