By
Chimamanda U. Martha
April 25th, 2024
Bakkt latest acquisition of DACC is viewed as an attempt to push forward its regulatory approval of a crypto custodian. Bakkt has also collaborated with banking firm BNY Mellon to securely distribute private keys.
Bakkt, the cryptocurrency startup by NYSE’s parent company Intercontinental Exchange (ICE) is further making new acquisitions to cement its relationship with the regulators. Thus, to gain regulatory approval for its crypto products, Bakkt has acquired the Digital Asset Custody Company (DACC).
Launched in August 2018, Bakkt aims to develop a reliable and regulated infrastructure for cryptocurrency investors. Bakkt also announced to bring its Bitcoin Futures in the market and is currently working with the CFTC regulator. However, Bakkt needs a strong custodian to back its physically-settle Bitcoin Futures contracts. Ten days back, Bakkt applied for the NYDFS license to get regulatory approval for being a qualified crypto custodian.
On Monday, April 29, Bakkt COO Adam White explained that with the DACC acquisition, the company plans to develop a secure digital asset custodian solution. White wrote that DACC shares Bakkt’s vision of providing utmost importance to developing secure digital storage solutions. White also noted that the DACC acquisition can help Bakkt to add new other cryptocurrencies apart from Bitcoin. He wrote:
“As we look to scale and support custody of additional digital assets, DACC’s native support of 13 blockchains and 100+ assets will serve as an important accelerator, and we’re pleased to welcome Matthew Johnson, Adam Healy, and the entire DACC team to Bakkt.”
White further added that “The (DACC) team’s experience integrating multiple blockchains and operating cutting-edge consensus mechanisms is a valuable addition to our team and future product line.”
Bakkt Partners With U.S. Bank BNY Mellon
Besides the DACC acquisition, Bakkt has joined hands with U.S. Bank BMY Mellon to geographically distribute the private keys secured by the bank. In the announcement, White wrote:
“All cryptographic systems are secured in bank-grade vaults and data centers that are protected with 24/7 physical security. Role-based permissions strictly limit employee access, and systems are routinely tested to ensure a seamless transition to our parallel disaster recovery facilities.
Additionally, Bakkt is working closely with BNY Mellon to offer geographically-distributed storage of private keys secured by the bank. BNY Mellon has a longstanding history of safeguarding the assets of institutional clients such as hedge funds, asset managers, and broker-dealers, and we’re excited to work with them”.
To appeal the high-net individuals and professional institutional investors, Bakkt has already approached global insurance carriers for safe and secure Bitcoin custody. The insurance for Bitcoin custody will help to set off potential risks involved with crypto storage.
White wrote:
“The majority of assets are stored offline in air-gapped cold wallets that are insured with a $100,000,000 policy underwritten by leading global insurance carriers.”
While Bakkt’s Bitcoin Futures have been delayed several times in the past, one thing is sure that the company is putting up every effort to bring its services to the market as early as possible.