ICE-Backed Bakkt Alerts of Possible Closure, Cites Cash Crisis
Bakkt, the cryptocurrency platform backed by the Intercontinental Exchange (ICE), has issued a warning about its financial health.
In a recent document filed with the U.S. Securities and Exchange Commission (SEC), Bakkt outlined its financial challenges, stating concerns over its ability to operate in the coming year due to insufficient cash reserves.
Bakkt’s Future of Risks and Inabilities
“We might not be able to continue as a going concern,” said Bakkt. “We have determined that we do not believe that our cash and restricted cash are sufficient to fund our operations for the 12 months following the date of this Amended Form 10-Q.”
“We cannot conclude it is probable we will be able to increase revenues substantially beyond levels that we have attained in the past in order to generate sustainable operating profit and sufficient cash flows to continue doing business without raising additional capital in the near future,” said Bakkt.
In addition, the company elaborated on the potential uncertainties it might face in the future. According to the filing, the “disruptions” of the crypto market, possible rejections from banking services, compliance failures, and other economic and business factors could all pose risks to its operation.
The possibilities, moreover, may result in Bakkt’s inabilities to develop new services and products, to continue supporting its current services, and even to maintain its functional internal controls.
“If we are unable to develop and maintain effective internal controls over financial reporting, we may not be able to produce timely and accurate financial statements,” said the company. “Which could have a material adverse effect on our business.”
Expansion Plan Targeting Global Markets
In November 2023, Bakkt Holdings announced its expansion into both international and domestic markets. The digital asset marketplace detailed its plans to extend cryptocurrency capabilities across numerous global markets, servicing both existing partnerships and new clients.
In partnership with Hapi, a stock trading platform, Bakkt expanded its operations into Mexico and Argentina and was poised to launch in Brazil before the end of 2023.
The expansion efforts also reached into Europe, where launches in Spain were anticipated, along with Bakkt providing crypto trading and custody services in the United Kingdom and the European Union through the crypto app 3.0 verse.
Besides, Bakkt’s expansion strategy included a focus on Asia, with planned launches in Hong Kong and Singapore.
