Recently launched bitcoin trading platform, Bakkt announced today that it had received approval from the New York Financial Services Department (NYDFS) to serve as a custodian for digital assets.
Until now, Bakkt could only keep custody of bitcoins that clients were trading on the platform, but will under the new regulatory approval, extend this service to institutional clients who want to store their bitcoins with a custodian.
Providing such a service, as noted by Bakkt in today’s announcement, is “the critical link in the institutional adoption of Bitcoin,” given that such large holders demand institutional-grade storage for their digital assets.
The blog post further elaborated the level of security required:
Safely storing digital assets demands a comprehensive approach to custody. Institutions and sophisticated investors need more than cutting-edge technology. They require proven infrastructure, robust operational controls, and independent oversight.
Meanwhile, the latest development marks another significant step for Bakkt, whose delayed launch was primarily contributed to by the hesitance of regulators to allow the company to custody clients bitcoins from the start.
With that hurdle now cleared, Bakkt revealed that it has onboard its first institutional custody clients, namely Pantera Capital, Galaxy Digital, and Tagomi.
As we reported last month, Bakkt is also eyeing the release of a consumer-focused app within the first half of next year, perhaps suggesting that the Intercontinental Exchange backed startup is not only targeting institutions but the wider crypto community.