Bakkt Holdings, a prominent player in the digital asset industry, is refocusing on digital asset custody as its primary business. The company has announced its support for six new coins in addition to Bitcoin and Ether, expanding the range of tokens available on its Bakkt Custody platform. This relaunch marks a significant step forward in Bakkt’s commitment to providing secure and reliable custodial services to institutional clients.
Enhancements to Bakkt Custody Platform
The Bakkt Custody platform has undergone several enhancements to improve its functionality and security. Notably, it now supports a total of eight tokens, including Bitcoin, Ethereum, Bitcoin Cash, Ethereum Classic, Litecoin, Dogecoin, USD Coin, and Shiba Inu. These additions align the custodial platform with the tokens available on Bakkt Trading, allowing for seamless transitions between platforms for clients.
One of the key features of the redesigned Bakkt Custody platform is segregated on-chain wallet addresses. This feature provides clients with the flexibility to configure security processes within the application. Additionally, the platform now offers improved reporting features, enabling users to track their digital assets more effectively.
Institutional-Grade Security and Compliance
Bakkt Custody, operated under Bakkt Trust Company LLC, a New York Department of Financial Services (NYDFS)-qualified custodian, prioritizes institutional-grade security and reliability. The platform employs rigorous security measures, including techniques like cold storage and multi-signature technology, to safeguard cryptographic keys. Furthermore, it is insured to protect digital assets and subjected to independent third-party testing.
Bakkt’s President and CEO, Gavin Michael, emphasized the platform’s commitment to qualified crypto custody. He highlighted that client security remains a top priority, with Bakkt Custody adhering to institutional standards by never co-mingling funds. The addition of new assets and seamless transitions between platforms further demonstrates Bakkt’s dedication to expanding its offerings securely and in compliance with regulations.
The newly added token capabilities are set to be integrated into the Bakkt Custody platform in December 2023. Bakkt also has plans to continue adding more coins to its custodial services in early 2024.
Strategic Enhancements and Industry Recognition
To fortify its position in the custody sector, Bakkt implemented strategic enhancements to adapt to the evolving regulatory landscape. Despite reporting an adjusted EBITDA loss of $21.6 million for Q3 2023, Bakkt showcased progress in the custody space. The company secured agreements with LeboBTC Ledger Group (LLG) and Unchained and expressed preliminary plans to join EDX Markets’ clearing house and custodial network as a qualified custodian.
In Q3 2023, Bakkt reported significant crypto revenue of $191.8 million, driven by the Apex Crypto acquisition. The company’s total revenue for the quarter amounted to $204.8 million, and it had assets under custody totaling $505.7 million. Despite a 28% decrease in assets under custody compared to the previous year, Bakkt remains a prominent player in the industry.
The recognition for Bakkt’s efforts in the custodial space came in the form of the Best Digital Assets Custodian award at the 2023 Digital Asset Awards from The Digital Banker. This prestigious award acknowledges Bakkt Custody’s excellence in innovation, transaction capability, risk management, and interoperability.
To further strengthen its position in crypto custody, Bakkt is actively forming partnerships. It has plans to provide clearing and custodial services for EDX Markets and aims to serve as a qualified backup custodian for the Wall Street-backed crypto exchange. The company is aware of traditional financial institutions making strides in the digital asset custody domain, such as BNY Mellon and Germany’s DZ Bank. This indicates the increasing adoption and importance of crypto custody in the financial industry.
