Bakkt Shuts App as Regulators Step Up Crypto Oversight

• Bakkt, a crypto custody service, is shutting down its consumer-facing app in light of increasing regulatory scrutiny.
• The platform will officially close down on March 16 and current users will have access to all their crypto and cash via a new web experience.
• The move comes as more crypto companies are moving away from consumer-facing products due to increasing regulatory pressure aimed at boosting consumer protection.

Bakkt Closes Consumer App

Bakkt, a crypto custody service that includes an app where consumers can view and transact with assets, has announced the closure of its consumer-facing app as regulatory scrutiny increases. In a Monday press release, the digital asset company said it is shutting its consumer-facing app to focus on business-to-business (B2B) tech services. The app will officially close down on March 16, and current users will have access to all their crypto and cash on the Bakkt platform via a new web experience, the company said.

Shift in Focus

Bakkt CEO Gavin Michael said in a statement:”As we continue to gain traction with our B2B2C strategy, we are laser focused on providing our partners and clients with seamless solutions that best serve their needs. The discontinuation of the app ensures we are supporting the relationship our partners and clients have with their customers.” Bakkt said it plans to capitalize on its B2B proposition on the back of its planned acquisition of crypto trading infrastructure firm Apex Crypto. Apex Crypto provides security and liquidity while integrating crypto products onto a platform. The platform reportedly has more than 30 signed fintech partners, serving over 5 million customers.

Regulators Cracking Down

The move by Bakkt comes as more and more crypto companies are moving away from consumer-facing products amid increasing regulatory scrutiny aimed at announcing measures to foster consumer protection. Specifically, the collapse of FTX, once the third-largest cryptocurrency exchange in the world that filed for bankruptcy in November last year and delivered billions in losses to retail customers, attracted the ire of regulators worldwide. In late January, the White House detailed its plans to address potential risks from cryptocurrencies in a roadmap that calls for authorities to “ramp up enforcement where appropriate” and Congress “to step up its efforts” to regulate the industry. Specifically, the government asked Congress to increase efforts to regulate the crypto market. “Congress should expand regulators’ powers to prevent misuses of customers’ assets—which hurt investors and distort prices—and to mitigate conflicts of interest,”the Biden administration said in the post.

Kraken Agreement With SEC

Last week,the SEC reached an agreement with crypto exchange Kraken to stop offering staking services or programs to clients in the countryand pay $1 million penalty for failingto register such services with regulatorin prior years despite being awareof registration requirements according toreports by Reuters news agency citingSEC documents released last Friday(March 5). Under this settlementagreement between Kraken ExchangeInc., an affiliate that acts as custodianof digital assets held by US customersand SEC staff members overseeingenforcement activities related topublic companies cryptos investmentproducts; Kraken agreed not toprovide staking services orprograms for three years withoutregistering them properly within therequired time frame determinedby federal law..

Conclusion

Ultimately these regulations allow cryptocurrency exchanges like Krakenexchange Inc., who comply withregulations set by governing bodieslike SEC , FTC , FinCEN etc.;to operate legally thereby promotinga safe environment for investmentsthat benefit US consumers whileprotecting them from fraudsters whopreviously exploited them throughillegal activities involving unregulatedcrypto operations .