Bakkt bogged down in regulatory disputes

Intercontinental Exchange Inc., ICE hit a brick wall with its Bakkt project that is supposed to become a platform for Bitcoin futures trading.  

The company planned to launch Bakkt platform in November 2018, however, the Commodity Futures Trading Commission (CFTC) is in no hurry to give the project a green light.  

Initially, the company planned to store customers’ bitcoins to allow for physical delivery. But according to CFTC, in this case ICE will have to disclose its business plan and undergo a public comment period, which would delay the approval process, the Wall Street Journal reports citing people familiar with the matter. 

An ICE spokesman said that the company is working through the approval process, but declined to provide any further details. 

Physical delivery means that traders would have to accept bitcoins or deliver them to Bakkt digital storage for cryptocurrency assets at the end of each trading day in accordance with future contracts specifications. 

Under this structure, Bakkt would be responsible for customers’ assets, which raises regulatory questions.  

“There remains a great deal of skepticism among some regulators. It’s still very much crypto winter,” John Collins, a partner at FS Vector, a fintech advisory firm commented. 

Thus, CFTC is concerned with the issues potential issues that may arise in conjunction of cryptocurrencies being used as a collateral.