The Days Of Unregulated Bitcoin Derivatives Exchanges Won’t Last Forever

Fibo Quantum

Bakkt, the Bitcoin Futures trading platform for institutions, had caused a lot of positive noise before its actual launch in mid-2019.

The platform is backed by ICE, and since its launch, there is a constant growth in its daily reported traded volume. It had crossed the benchmark of 6,000 delivered Bakkt Bitcoin Futures. Those are contracts traded at ICE Futures US.

Earlier today, during a closed Bakkt event in Tel Aviv attended by CryptoPotato, President Adam White discussed the current state of the crypto regulations, along with Bakkt’s plans. He also hinted at Bakkt’s next contracts beyond Bitcoin.

Adam White, President of Bakkt, in Tel Aviv. Photo by: CryptoPotato

The Only Fully Regulated Bitcoin Market

According to White, Bakkt is the world’s first and only fully regulated end-to-end market when it comes to the price discovery of Bitcoin.

What does that mean? Bakkt has a regulated custody, regulated exchange trading, and regulated clarity. Bakkt is not vertically integrated. It has a monolithic structure that is a custodian, and, according to White, this kind of model is essential, unlike other markets where the custodian and the chains tend to be separate.

White, as an early employee of Coinbase, doesn’t see them as a custodian at all. “I was an early employee at Coinbase, and your custodian didn’t even call it custody. It was just a byproduct of what you had to do to be able to trade.” – Explained by White. “We think it’s really important that while ICE is a majority shareholder and investor in Bakkt, they are not our outright owner.”

Unregulated Venues Won’t Last Forever

White states that ICE is helping to bring crypto trading onto regulated markets, and that a lot of what is done by him and his team is carried out by working with regulators in the US and abroad.

Unlike Bakkt’s regulated way that has its market data based on their physically delivered futures contracts, White sees a challenge with unregulated exchanges in the fact that their market data is self-reported and that there is no regulatory oversight there.

“We’re watching trading happening offshore, on unregulated venues, with very little KYC, no AML – these days are not going to last forever.” And yes, White is aiming directly at BitMEX, Bybit, and the other leading crypto margin exchanges. “Regulators are slow, but they are persistent, and they will not allow this to happen indefinitely.” Concludes White.

Former CEO, Senator Kelly Loeffler, To Help Drive Crypto Legislation

Recently, Bakkt’s former CEO, Kelly Loeffler, stepped off her position as a CEO at Bakkt to take a seat in the US Senate. Naturally, this aligns with the company’s long-term goals.

“Our role is also helping advocate, educate, walk through how regulators can embrace this (cryptocurrency) technology without stymieing and squirming, without trying to shut it down and actually think this is really cool.”

“She (Kelly Loeffler) is now one of a hundred senators in the US and can help drive legislation and educate the US Congress on how crypto can actually solve some problems.”

Kelly Loeffler
Kelly Loeffler. Former Bakkt CEO, now US Senator

Ethereum Contracts – The Next Bakkt Product?

One of the most exciting questions is whether Bakkt plans to expand its contract variety.

At the time of this writing, out of the thousands of cryptocurrencies, Bakkt offers only Bitcoin contracts.

“We want to be able to store anything our customers want. We’re a business and we’re here to provide that service. Now does that mean ICE is going to create a future on every crypto asset? Probably not.”

However, White gave some clues of the next cryptocurrency that will be added to their platform. “There’s still a lot of cryptocurrencies that it’s unclear if they securities, Are they currencies or commodities. The CFTC has only said they’d theoretically have approved futures on mainstream crypto assets, Bitcoin and Ethereum. Other than that, it’s still unknown. It’s under us.”

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