ICE Pushes for Bakkt Bitcoin Custody License

The Intercontinental Exchange is reportedly taking steps to ensure approval from the United States Commodity Futures Trading Commission for its bitcoin futures contracts platform - Bakkt.

ICE, the operator of the New York Stock Exchange, recently acquired a cryptocurrency custodial service and are mulling plans to register Bakkt as a licensed trust in the state of New York.If successful, these latest moves would see Bakkt become a registered bitcoin custody platform.

DACC acquisition and bitcoin custody plansAs reported by Cointelegraph on Monday, April 29, 2018, Bakkt's parent company, ICE, acquired Digital Asset Custody Company - a cryptocurrency custodial platform.

ICE is reportedly looking to have the company registered as a trust in the state of New York.If successful, Bakkt would have the legal authority to act as a qualified custodian for bitcoin and other digital assets.

As part of its plan to offer robust cryptocurrency custody solutions, Bakkt is partnering with BNY Mellon to establish private key storage in multiple geographic locations.

Loeffler's comments aside, the original Bakkt application filing shows the company offering physically settled bitcoin futures contract with the physical delivery carried out via "Warehousing," as opposed to physical storage of the underlying asset.

With Bakkt offering bitcoin futures contracts settled not in cash like CBOE or CME but in the underlying asset, there seem to be issues with balancing the various regulatory hurdles that need to be surmounted.

There is a plausible scenario in which constituent firms of the ICE clearing house might not be open to one of its members holding BTC as part of the settlement process for Bakkt's bitcoin futures contracts.

ICE released a press statement in November 2018 announcing the shifting of the launch date to January 2019.However, Bakkt failed to obtain the CFTC approval, which led to another postponement.

Thus, the commission has been consistent in its insistence that Bakkt develop a more robust infrastructure for holding bitcoin and settling bitcoin futures contracts.