Crypto Custody Service Bakkt discontinues consumer app as regular crackdown intensifies
Bakkt, a crypto custody service that includes an app where consumers can view and trade assets, has announced the shutdown of its consumer-facing app as regulatory scrutiny increases.
In a press release Monday, the digital asset company said it is shutting down its consumer-facing app to focus on business-to-business (B2B) technology services.
The app will officially shut down on March 16, and current users will have access to all crypto and cash on the Bakkt platform via a new online experience, the company said. 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 customers with seamless solutions that best meet their needs. Discontinuing the app ensures that we support the relationship our partners and customers have with their customers.”
Bakkt said it plans to leverage 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 on one platform. The platform reportedly has more than 30 signed fintech partners, serving over 5 million customers.
Regulators are cracking down on crypto firms
The move by Bakkt comes as more and more crypto companies move away from consumer-facing products, while increasing regulatory scrutiny aimed at announcing measures to promote consumer protection.
Specifically, the collapse of FTX, once the third largest cryptocurrency exchange in the world that filed for bankruptcy last November and delivered billions in losses to retail clients, alarmed regulators worldwide.
In late January, the White House detailed its plans to address potential risks from cryptocurrencies in a roadmap that calls on the government to “increase enforcement where appropriate” and Congress “to step up its efforts” to regulate the industry.
Specifically, the government asked Congress to step up efforts to regulate the crypto market. “Congress should expand the government’s authority to prevent misappropriation of customer assets — which hurts investors and distorts prices — and to curb conflicts of interest,” the Biden administration said in the post.
Last week, the SEC reached an agreement with crypto exchange Kraken to stop offering betting services or programs to clients in the country and pay $30 million to settle allegations that it violated the agency’s rules.
According to the SEC, Kraken “failed to register the offering and sale of its cryptoasset staking-as-a-service program,” which the commission now qualified as securities.
And more recently, the agency revealed that it intends to sue stablecoin issuer Paxos, which is behind the Pax Dollar (USDP) and Binance USD (BUSD) tokens, over the latter stablecoin.
