Adam White, the former Coinbase executive turned Bakkt COO, wrote in a blog post Monday that it acquired DACC to continue developing a secure digital asset storage solution. DACC’s team “share [Bakkt’s] security-first mindset,” he wrote, while also bringing experience in building its own secure and scalable custody solutions.
White hinted that the acquisition may also help Bakkt add cryptocurrencies beyond bitcoin sometime after launch, writing:
“As we look to scale and support custody of additional digital assets, DACC’s native support of 13 blockchains and 100+ assets will serve as an important accelerator, and we’re pleased to welcome Matthew Johnson, Adam Healy, and the entire DACC team to Bakkt.”
Bakkt did not reveal how much it spent to acquire the custodian.
To further aid its storage solutions, Bakkt has been working with global bank BNY Mellon to set up “geographically-distributed” private key storage, White wrote.
BNY Mellon has a long history of storing institutional clients’ assets, including hedge funds, asset managers and broker-dealers, he said.
The exchange has also secured insurance for funds stored offline.
“Bakkt uses both warm (online) and cold (offline) wallet architecture to secure customer funds. The majority of assets are stored offline in air-gapped cold wallets that are insured with a $100,000,000 policy underwritten by leading global insurance carriers,” he wrote, though he did not identify who these carriers were.
White also confirmed Monday that Bakkt was seeking a qualified custodian license through the New York Department of Financial Services. If granted, the exchange would be able to provide a regulated custodian for any crypto assets that it holds, which may ease its launch of physical bitcoin future contract.
As previously reported, Bakkt’s original plan to custody bitcoin itself and settle contracts through its parent firm’s warehouse, ICE Clear US, may fall into a regulatory gray area. Its launch has been indefinitely delayed pending approval by the U.S. Commodity Futures Trading Commission.
Adam White image via CoinDesk archives