Bakkt, Crypto Platform Backed by NYSE Owner, Warns of Possible Business Closure Due to Cash Shortage

Bakkt, a cryptocurrency custody and trading platform, has issued a warning in a filing with the U.S. Securities and Exchange Commission (SEC) stating that it may not have enough cash to continue operating. The company, which was launched in 2018 with the aim of enabling Starbucks customers to purchase coffee with Bitcoin, has expressed concerns about its ability to remain a “going concern.”

Bakkt, which was introduced with much anticipation by the owner of the New York Stock Exchange, Intercontinental Exchange, has stated in the filing that it does not believe its current cash and restricted cash holdings are sufficient to fund its operations for the next 12 months. In an effort to address this issue, the company is seeking to sell up to $150 million of securities.

The initial goal of Bakkt was to facilitate Bitcoin transactions for Starbucks customers, but the company has since shifted its focus to providing crypto custody and trading services. It launched a digital wallet in 2021, but this offering was discontinued last year.

The use of Bitcoin and its underlying blockchain technology for payments has faced challenges and has seen limited success thus far. However, the Lightning Network, a layer-2 blockchain solution that allows for more efficient processing of Bitcoin transactions, aims to improve the feasibility of using Bitcoin for everyday payments.

Bakkt went public in 2021, but its stock has experienced a significant decline in value. As of Wednesday, the stock closed at $1.45, down from over $40 in 2021.

The company’s warning about its financial situation raises concerns about the viability of cryptocurrency platforms and the challenges they face in the market. It also highlights the need for regulatory oversight and financial stability in the cryptocurrency industry.

UPDATE (Feb. 8, 2023, 04:39 UTC): Bakkt has released a statement in response to the concerns raised in the filing. The company remains committed to its operations and is actively seeking solutions to address its financial situation.