Bakkt struggles with crypto business, says it might 'not be able to continue'
Bakkt has been experiencing struggles with its crypto business and is now seeking ways to raise capital.
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Crypto payments and digital assets platform Bakkt recently filed an amendment to its quarterly report to the Securities and Exchange Commission, warning the regulator that it may “not be able to continue” its business over the next 12 months, citing the changing nature of risk factors in the crypto industry.
“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 filing],” Bakkt said in the amended report.
According to the filing, Bakkt has been experiencing struggles with its crypto business and is now seeking ways to raise capital. A deleted post from X indicates that Bakkt also amended a Form S-3 filing, which allows the firm to issue up to $150 million worth of securities that could be used to ease its limited cash flow and fund its “long-term vision.”
“As we are currently unable to generate sustainable operating profit and sufficient cash flows, we have determined that our future success will depend on our ability to raise capital. We are seeking additional financing and evaluating financing alternatives in order to meet our cash requirements,” Bakkt said in the filing.
Bakkt was established in 2018 by Intercontinental Exchange, which owns and operates the New York Stock Exchange (NYSE). Bakkt’s launch was regarded as one of the first forays of crypto into institutional investors despite the impending bear market at the time. Former US Senator Kelly Loeffler was Bakkt’s first CEO, serving until 2019. Bakkt generated revenue through trading, custody, and payment services.
By 2021, Bakkt had introduced a digital wallet rivaling apps like Venmo and PayPal. Following a merger with special purpose acquisition company VPC Impact Acquisition Holdings, Bakkt went public, with share prices spiking to over $40. Following its SEC filing, Bakkt’s stock dropped 7.6% on Wednesday, trading after-hours at $1.34. Bakkt’s stock is down 37% since the year opened.