Bakkt’s COO, Adam White, has announced the launch of a new enterprise-grade bitcoin custody service created specifically for institutions.
It is the already existing Bakkt Warehouse service, which is now also available to institutions.
In fact, thanks to the authorisation obtained from the New York Department of Financial Services (NYDFS), they will now be able to offer this BTC custody service to institutions as well, whereas previously it only served customers who exchanged future contracts offered by the company.
In order to be able to offer such a service and receive NYDFS approval, technical guarantees are not sufficient, but there must also be a proven infrastructure, strong operational controls and independent supervision.
Bakkt Warehouse employs physical, operational and IT security safeguards. It also has the support of its parent company, the Intercontinental Exchange (ICE), which owns and operates a market infrastructure that large financial institutions already rely on.
For example, the operating structures are protected by both a constantly active video monitoring system and armed guards, and the system is equipped with a $125 million insurance policy.
In addition, all signature operations are geographically distributed and require multiple entities in multiple locations to fully sign a transaction.
Independent oversight is carried out by the Bakkt Trust Company, a limited purpose trust regulated by the NYDFS and with an independent majority board, including audit committees and examiners.
According to White, this service has already been chosen by Pantera Capital, Galaxy Digital and Tagomi.
This kind of custody services are required at the institutional level, where it is not possible to use simply wallets with seeds and private keys.
Many financial institutions are not able to guarantee secure preservation of digital assets with high-security standards and therefore must necessarily use intermediaries able to offer such services.