Expanding Bakkt’s founding team with Adam White
Building a talented team at Bakkt is central to delivering on our vision to create a transformational digital asset ecosystem. That’s why I’m thrilled to announce that we will welcome Adam White as Chief Operating Officer in November.
If you know Adam, you may know he was employee #5 at Coinbase, the largest digital currency platform in the U.S. Equally important as his credentials, he’s also an excellent fit with our culture of collaboration, problem solving, integrity and leadership. As a visionary and a strong operator, Adam is a much anticipated addition to our busy team.
Adam and I spoke to Fortune’s Shawn Tully over the weekend, and you can read his story on Adam joining Bakkt, along with his earlier piece on the inspiration for our platform to buy, sell, store and spend digital assets.
Speaking of our launch, we’re hard at work with members and customers preparing for it. Our exchange and clearing house boards — and the clearing house risk committee — have all reviewed and approved the respective rules. We plan to file these rules publicly with the CFTC for review and comment very soon. We’re taking a transparent approach to engage across the industry as we begin testing and onboarding in November, and trading and warehousing in December, subject to CFTC approval.
Our patent-pending market model is focused on mitigating risk while creating opportunities for institutions to serve their clients in a regulated framework for digital assets. This means creating a solution that both provides wanted exposure and limits unwanted exposure. A critical aspect of our model is ensuring that our clearing members are well protected from a risk perspective through a conservative market design, including:
o a requirement of full prefunding for all Bitcoin trades
o allowing clients to onboard directly to the warehouse, meaning that clearing members will not be required to handle cryptocurrency themselves, and
o a new, separate guaranty fund for Bitcoin, fully funded by Bakkt and ICE, helps ensure that non-defaulting clearing member capital is not at risk in the waterfall
These points should also eliminate misconceptions regarding commingling, leverage and rehypothecation, which are not features of our offering. We are committed to serving the market in a productive and secure manner as customer needs and regulatory frameworks evolve.
I’ll close by noting the recent LabCFTC FinTech Forward conference generated a helpful dialogue on digital assets, with a range of regulators, industry participants and observers in attendance. Many of us share the view that a new asset class is forming and a framework for operating within these markets is welcome. The potential for product development is strong, as is the need for regulatory certainty.
In my remarks, I offered an example of how regulatory clarity supported growth in the global oil markets. In 2002, Intercontinental Exchange listed only a handful of oil contracts — and today, it offers over 500 oil contracts. At the same time, the oil market went from inconsistent regulation in bilateral, opaque and fragmented OTC trading to a regulated futures market that was transparent and liquid — and many times larger and more useful for commercial hedgers and traders. The market grew alongside the application of regulation. That’s why we believe the sooner a regulatory approach to digital assets is determined, the better positioned we are to support healthy markets and innovation within a dynamic global marketplace.