American digital asset management platform Bakkt has indicated it is looking to spread its wings outside the US, citing lack of regulatory clarity in the country. The company is seeking expansion to Hong Kong, UK, and the EU.
Bakkt is targeting regions with strong regulatory clarity to fuel the growth of its business since the US is lacking in regulatory clarity. According to the company’s CEO Gavin Michael, these regions are moving faster than the US in terms of regulation, making them more attractive.
“We’ve said quite clearly that whilst we’re committed to the U.S. market, we’re looking for markets where there’s traction and using those markets as a way to fuel growth,” Michael said at the Piper Sandler Global Exchange & FinTech Conference last month.
“We’re particularly focused on Hong Kong, the UK and parts of the EU because we see partners wanting to move into those spaces and we want to be able to support them,” he added.
The expansion plans come on the heels of Bakkt’s April acquisition of Apex Crypto, a U.S-based integrated crypto-trading platform initially owned by Apex Fintech Solutions. Michael said that Bakkt intends to leverage Apex’s existing partnerships with companies like Webull, M1, Public.com and Stash to expand internationally.
Bakkt will easily add crypto trading to the U.S. equities trading these platforms offer internationally, giving the company an easy entry point to the international crypto market.
The US Lagging Behind in Crypto Regulation
The US is one of the most backward countries when it comes to crypto regulation. Apart from not having a clear regulatory framework, it is also one country that has persecuted the crypto industry more than any other.
As a result of its recent crackdown, Bakkt itself had to delist 25 assets. Michael says markets outside the US are getting more traction because of this.
“And when you pull back further from the U.S. and you look at what’s happening in other markets, we see them moving slightly ahead of where we are,” he said. He noted that the UK is moving forward with clear crypto regulation, that Hong Kong is allowing trading in certain cryptocurrencies and that the EU has passed its MiCA framework for crypto regulation.
The Call for Clearer Regulation
While Michael believes the regulatory action in the US is timely, he believes the US needs to make progress with more regulatory clarity at the federal level. Such lack of clarity is hindering many big corporations from working with the company, the CEO said.
The regulatory issue has also led to a slowdown in Bakkt’s trading platform to the custody service which is seeing a lot more traction.