Bakkt launches institutional Bitcoin custody service with $125 million in insurance 🚨 This article is 5 years old...
Bakkt launches institutional Bitcoin custody service with $125 million in insurance
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Updated: Mar. 24, 2020 at 6:51 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bakkt launched its Bitcoin custody warehouse, its institutional BTC custody solution, protected by a $125 million insurance policy. The launch is part of the physically-settled Bitcoin futures it plans to launch on Sept. 23.
Going according to plan
Bakkt was delayed several times due to concerns from regulators. However, the subsidiary of the Intercontinental Exchange (ICE) recently received approval from the U.S. Commodity Futures Trading Commission (CFTC) to launch its crypto-settled Bitcoin futures.
Meant to give institutions exposure to Bitcoin, Bakkt‘s contracts were seen as a turning point in the industry. Bakkt may finally bring BTC to mainstream financial institutions by acting as the first physically settled futures contracts on the market.
Today, Bakkt opened up its Bitcoin “warehouse” for business, allowing customers to deposit and withdraw Bitcoin into their account. Traders can also get acquainted with the trading process ahead of the official Sept. 23 launch through a test version of the platform.
Not taking chances
Given the potential size of Bakkt’s Bitcoin holdings, ensuring users are protected from hacking or fraud is essential. To protect these funds Bakkt decided to get $125 million in insurance coverage.
The Bakkt Warehouse is active for futures
Bitcoin deposited at our Warehouse is protected by a $125 million insurance policy
— Bakkt (@Bakkt) September 9, 2019
That said, many onlookers saw this as an added liability rather than an extra layer of security. Many were shocked, saying that Bakkt’s Warehouse is likely to store far more than $125 million in Bitcoin. Others doubted the insurer and the policy itself, saying there wasn’t sufficient information to gauge whether the issuer is credible.
Most clearly, several influencers didn’t seem comfortable putting their Bitcoin in the hands of a centralized custodian such as Bakkt.
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Bitcoin
$97,449.49
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Bakkt
Bakkt is a new company of NYSE-operator InterContinental Exchange (ICE) designed to bring digital assets to the mainstream and help unlock the potential of this important technology.