Bakkt, a cryptocurrency storage service that includes an app where consumers can view and transact with assets, has announced the closure of its consumer app amid increased regulatory scrutiny.
In a press release on Monday, the digital asset company said it is shutting down its consumer-facing app to focus on business-to-business (B2B) technology services.
The app will officially shut down on March 16, and current users will be able to access all their cryptocurrencies and cash on the Bakkt platform through a new web interface, the company said. Bakkt CEO Gavin Michael said in a statement:
“As we continue to develop our B2B2C strategy, we are focused on providing our partners and customers with seamless solutions that best suit their needs. Discontinuing the program ensures that we maintain the relationships that our partners and customers have with their customers.”
Bakkt said it plans to capitalize on its B2B offering based on its planned acquisition of crypto trading infrastructure firm Apex Crypto. Apex Crypto provides security and liquidity by integrating crypto products into the platform. The platform reportedly has more than 30 fintech partners signed up, serving more than 5 million customers.
Regulatory authorities are cracking down on crypto companies
Bakkt’s move comes as more and more crypto companies move away from consumer-facing products amid increased regulatory scrutiny aimed at announcing measures to promote consumer protection.
In particular, the collapse of FTX, once the world’s third-largest cryptocurrency exchange, which filed for bankruptcy last November and caused billions in losses to retail customers, drew the ire of regulators around the world.
In late January, the White House detailed its plans to address the potential risks associated with cryptocurrencies in a roadmap that calls on the government to “strengthen enforcement where necessary” and Congress to “step up its efforts” to regulate the industry.
In particular, the government asked Congress to step up efforts to regulate the crypto market. “Congress should expand the powers of regulators to prevent abuse of client assets that harms investors and distorts prices, and to mitigate conflicts of interest,” the Biden administration said in a statement.
Last week, the SEC reached an agreement with crypto exchange Kraken to stop providing staking services or programs to customers in the country and pay $30 million to settle allegations that it violated the agency’s rules.
According to the SEC, Kraken failed to register the offering and sale of its cryptocurrency placement program as a service, which the commission has now classified as securities.
And recently, the agency revealed that it intends to sue the stablecoin issuer Paxos, which is behind the Pax Dollar (USDP) and Binance USD (BUSD) tokens, over the latter stablecoin.
