A March 21 report by the Wall Street Journal (WSJ) notes that the Bakkt project which plans to offer physically delivered daily bitcoin futures to investors is yet to launch because of a regulatory issue that “ran aground” before now.
Sources familiar with the matter told WSJ that the issue has to do with Bakkt’s decision to offer custody of client’s Bitcoins.
In February, the U.S Commodity and Futures Trading Commission (CFTC) told Bakkt that if they were to custody client’s assets, then getting approval will require more compliance measures than the usual process for futures market operators.
Specifically, the CFTC required that Bakkt disclosed their business plan ahead of a potential public comment period that would allow the regulators to gather more insight about the proposed offering.
WSJ reports that Bakkt opted to skip that process which would further delaying getting approval and is now working with the CFTC to come up with other options that would see the new platform meet regulatory compliance in shorter time.
Notably, it is said that the CFTC suggested that Bakkt registers as a trust company, even though other sources claim that such a process would also be time-consuming.
Whatever method Bakkt decides to adopt, what is clear is that a timeline for the official launch may still be far away. A spokesperson from the Intercontinental Exchange (ICE) contacted by WSJ in the report could only echo words from the last time that a Bakkt postponed their proposed launch date.
“We are working through the regulatory review process and are looking forward to updating the market soon,” the spokesperson said.
The crypto industry believes that the launch of the Bakkt platform will usher in more institutional investors into the space since Bitcoin Futures allow investment into Bitcoin without really owning the cryptocurrency.