Bakkt
Bakkt follows Robinhood, eToro in delisting major altcoins: Report
New York-based derivatives exchange Bakkt is delisting three popular altcoins due to recent regulatory developments in the United States. According to a Fortune report, trading of Solana (SOL), Polygon (MATIC), and Cardano (ADA) has been suspended.
The decision follows last week’s lawsuits brought by the Securities and Exchange Commission (SEC) against crypto exchanges Binance and Coinbase. In the complaints, the regulator labeled over 20 digital assets as securities, including SOL, MATIC, and ADA. The total number of cryptocurrencies the U.S. regulator sees as a “security” has now reached an estimated 68.
Marc D’Annunzio, Bakkt’s general counsel and secretary, told Fortune the company was implementing changes “until there is further clarity on how to compliantly offer a more extensive list of coins.”
The SEC’s enforcement actions have contributed to regulatory uncertainty, leading other trading platforms to delist token pairs in the past days. Earlier this week, eToro halted purchases of Algorand (ALGO), Decentraland (MANA), MATIC and Dash (DASH) for U.S. customers, just a few days after its competitor Robinhood ended support for SOL, MATIC, and ADA.
Related: Crypto fund outflows reach $417M over 8 weeks as investor caution persists
Among the major impacts on the crypto space, the delisting of altcoins tightens liquidity for tokens already suffering from the market downturn. Together, MATIC, ADA, and SOL lost nearly $10 billion in market capitalization, according to data from CoinMarketCap.
SOL’s market capitalization dropped from $8.78 billion on June 4 to $5.85 billion at the time of writing; ADA’s market cap dipped from $13.31 billion to $9 billion, while MATIC’s market cap declined from $8.37 billion to $5.32 billion in the same period.
Bakkt’s delisting follows its acquisition of blockchain technology platform Apex Crypto in April for $55 million in cash and stock. After the acquisition, Bakkt also promoted an overhaul of token pairs trading on the platform, dropping 25 of the 36 listed crypto tokens.
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The international regulatory environment for cryptocurrency is improving, and the company is eyeing a retail expansion on the continent, Bakkt chief product officer Dan O’Prey said. On the whole, O’Prey saw positive long-term trends.
Speaking to Cointelegraph’s U.S. News Editor, Sam Bourgi, at Bitcoin 2023, O’Prey described Bakkt as prioritizing its role as a “B2B2C” company for the past two years. As such, it has seen “a significant portion of the major institutional interest” focused on Bitcoin (BTC), in spite of the aftermath of the collapse of cryptocurrency exchange FTX. He said:
“We saw last year a lot of fallout and issues with companies, practices and coins in this space that I think have dragged Bitcoin down with it, even though those had nothing to do with Bitcoin.”
Bitcoin has benefited from the lack of regulatory clarity in the United States relative to other cryptocurrencies, as its status as a commodity has been established by regulators. Nonetheless, lack of regulatory clarity in the U.S. for cryptocurrencies in general has been “definitely the most top-of-mind hurdle” for Bitcoin adoption, says O’Prey.
“Over the last sort of three or four years, by doing things right, it’s been a little bit slower, but now we’re in a much stronger position, and the recent events have really highlighted the need for those practices.”
Bakkt’s retail platform for embedded trading, payouts and rewards operates only in the U.S., but Bakkt is planning to expand its retail activities internationally. According to the blockchain executive, the company is “working with some of our partners to identify jurisdictions that perhaps they already operate equities trading in or looking to add crypto or already have a presence.”
The hell is this. pic.twitter.com/MVguNYebUA
— Dan O’Prey ⚡ (@danoprey) May 19, 2023
O’Prey praised the Markets in Crypto-Assets regulations that were recently passed in the European Union: “Any form of clarity is by and large good. […] At least people know where they stand, they know how they can operate and they know how they can comply, and that enables businesses and institutions to participate in the space,” he said, adding that regions that provide regulatory clarity for crypto will “get a lot of inflow of talent, of capital [and] of jobs.”
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In a recent development, the digital asset firm Bakkt delisted 25 tokens used in decentralized finance transactions from its trading platform, Apex Crypto. Bakkt acquired the platform in 2022 with 36 tokens, now 11 after the overhaul exercise.
According to the firm, its reasons for delisting the tokens was to follow “up-to-date regulatory guidance.”
25 Tokens Failed Bakkt Coin Listing Review Process
Bakkt performed its normal coin listing reviews, after which it removed 25 tokens from the platform.
A Bakkt representative said the company aims to protect its customers’ best interests. As such, the review process focuses on how to serve those interests based on the latest industry developments and up-to-date regulatory guidance.
As of press time, the firm hasn’t released more details on the action. But the tokens were major ones that facilitated DeFi transactions.
These tokens include Aave (AAVE), Bancor Network Token (BNT), ApeCoin (APE), Basic Attention Token (BAT), Avalanche (AVAX), Cosmos (ATOM), Filecoin (FIL), Curve DAO (CRV), Chainlink (LINK).
Also, Compound Token (COMP), Enjin Coin (ENJ), Chiliz (CHZ), Fantom (FTM), GALA (GALA), Loopring (LRC), The Graph (GRT), Maker DAO (MKR), and Internet Computer (ICP) were delisted.
Other ones include Sushiswap (SUSHI), Uniswap (UNI), Synthetix (SNX), Yearn Finance (YFI), and Texos (XTZ).
This is not the first time Bakkt has made a major decision regarding its customer-oriented services. The firm shut down its retail app that supports crypto trading, gift cards, and loyalty rewards in February 2023.
At that time, the firm disclosed plans to focus on B2B technology solutions stating that it would offer crypto and loyalty rewards to businesses via API and SaaS solutions.
Apex Crypto Acquisition A Strategic Move To Expand Offerings
Apex Crypto was launched in 2019 as a turnkey platform for integrated crypto trading, allowing investors to transition from equity to crypto.
In November 2022, Bakkt acquired Apex Crypto to expand its services to neo-banks, fintech firms, and trading app platforms. Notably, the trading platform wasn’t profitable at the time.
But Bakkt wanted to boost its revenue by increasing its offerings through the trading platform. So, it acquired Apex Crypto for $200 million.
After the deal, Bakkt made the first payment of $55 million in cash and completed the payment in April 2023 with $145 million in stock.
Bakkt went public in October 2021 through a merger with VPC Impact Acquisition Holdings.
-Image Source: Pixabay, Chart: Tradingview
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Digital asset firm Bakkt has dropped 25 of the 36 crypto tokens listed on its recently acquired trading platform Apex Crypto.
A spokeswoman for the company told Cointelegraph on May 12 that the decision was “part of our regular coin listing review process,” and added that:
“Our clients’ and their consumers’ best interests are our core commitment, and our review process ensures those interests are best served when we contemplate the most up-to-date regulatory guidance and the latest industry developments.”
Further details are sparse at this stage, however most of the dropped tokens are tied to popular decentralized finance and nonfungible token ecosystems.
The delisted tokens include: Aave (AAVE), ApeCoin (APE), Avalanche (AVAX), Bancor Network Token (BNT), Basic Attention Token (BAT), Chainlink (LINK), Chiliz (CHZ), Compound Token (COMP), Cosmos (ATOM), Curve DAO (CRV), Enjin Coin (ENJ), Fantom (FTM), Filecoin (FIL), GALA (GALA), The Graph (GRT), Internet Computer (ICP), Loopring (LRC), Maker DAO (MKR), Republic (REN), Stellar (XLM), Sushiswap (SUSHI), Synthetix (SNX), Texos (XTZ), Uniswap (UNI) and Yearn Finance (YFI).
Bakkt announced plans to acquire the unprofitable Apex Crypto in November to gain a greater toehold in the fintech market that Apex catered to. Apex Crypto, a so-called “turnkey” service carries out execution, clearing, custody, cost basis and tax services for 5 million customers through 30 fintech customers. Bakkt completed the acquisition in April for $55 million in cash and $145 million in stock.
Related: Bakkt president Adam White announces departure from digital asset platform
Bakkt acquired a broker-dealer license from Bumped Financial in February, it disclosed in a financial statement.
In March, Bakkt shut down its retail-oriented app that offered crypto trading, loyalty rewards and gift cards, saying it would concentrate on B2B operations. Bakkt stated at the time that it would provide crypto and loyalty to businesses through SaaS and API solutions.
Bakkt is majority owned by Intercontinental Exchange, which also owns the New York Stock Exchange. Its stock closed down 7% on May 12.
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