Cryptocurrency custody and trading platform Bakkt Holdings is facing a class-action lawsuit filed by a group of investors who claim the firm misled shareholders by failing to disclose the full extent of its financial dependence on two major clients: Webull and Bank of America.
Filed in the U.S. District Court for the Southern District of New York, the complaint seeks a jury trial and names several top Bakkt executives, including former CEO Gavin Michael, current CEO Andrew Main, and interim CFO Karen Alexander.
The lawsuit, led by investor Guy Serge A. Franklin, alleges that Bakkt violated U.S. securities laws by misrepresenting the stability of its revenue stream.
Bank of America, which accounted for about 16% of Bakkt’s loyalty service revenue in 2023, will see its contract expire on April 22. Webull, which represented a larger 74% of Bakkt’s crypto service revenue last year, will end its agreement on June 14.
When both companies disclosed in March that they would not renew their contracts beyond 2025, Bakkt’s share price plummeted over 27% in a single day, prompting accusations that the firm failed to properly communicate the fragility of its revenue model.
In addition to the customer losses, Bakkt also announced it would delay the filing of its 2024 annual report with the SEC, further adding to investor concerns.
“As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages,” the filing states.
This is another legal headache for Bakkt, which has already drawn scrutiny from multiple law firms investigating potential securities violations.
Adding to the turbulence, Bakkt’s stock previously jumped by over 160% in November 2024 following reports that Trump Media & Technology Group was considering acquiring the firm. No formal deal has been confirmed.
As of early April 2025, Bakkt shares (BKKT) dropped over 36% in the past month, trading at $8.15, far below its all-time high of $1,063 in October 2021.
Bakkt was established by Intercontinental Exchange (owner of the NYSE) to enable Starbucks customers to purchase coffee with Bitcoin. Over time, it shifted its focus to crypto custody and trading services but has faced financial struggles, including an announcement in February that it lacked funds to operate for another 12 months.
The crypto custodian and trading firm reported a strong increase in total revenue to $780 million for the year 2023, yet encountered a net loss of $226 million.
In 2021, Bakkt launched a digital wallet, which was subsequently discontinued in 2022, as the company shifted its focus towards crypto custody and trading services.