Blame Game: NYSE-Backed Bakkt’s Delayed Launch Is Not CFTC’s Fault

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By CCN: Bakkt, the moon-shot bitcoin bet of trading behemoth Intercontinental Exchange (ICE), still can’t get approval from the U.S. Commodity Futures Trading Commission (CFTC). Many now believe its hopes depend on getting a much-hated BitLicense from New York.

Are U.S. regulators trying to kill Bakkt?

No.

Congress makes the laws. If the laws suck, Congress is supposed to fix them. Regulators exist solely to make sure everybody follows the laws.

In this case, the laws suck, but that’s not the CFTC’s fault.

The Problem With Bakkt

The CFTC says Bakkt should follow rules for commodities that need somebody to deliver and store actual physical products for traders. Think corn and copper, “real” things that take up actual space.

Those rules are designed to protect traders from theft and manipulation. For example, when corn dealers fluff the bushels or copper dealers fudge with the purity.

Certainly, this doesn’t make sense for cryptocurrency. You can’t debase cryptocurrency or dupe the blockchain.

Bakkt would prefer not to carry the costs and complexities that come with those outdated rules, but what can it do? Rules are rules, and the CFTC must enforce them.

Does this mean Bakkt is doomed?

No.

The CFTC understands the rules don’t make sense, and it’s working with Bakkt to figure out a solution.

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