In a significant development within the cryptocurrency industry, a cohort of investors linked to Bakkt Holdings has initiated a class-action lawsuit against the firm, asserting claims of false representations and a lack of transparency regarding its operational dealings. This legal action was spearheaded by lead plaintiff Guy Serge A. Franklin, calling for a jury trial in the US District Court for the Southern District of New York.
The crux of the lawsuit revolves around allegations that Bakkt, alongside its former CEO Gavin Michael and current executives, failed to adequately disclose critical information regarding its business relationships with major clients, namely Webull and Bank of America (BoA). The investors contend that these oversights resulted in substantial financial damages, tied to alleged violations of U.S. securities laws.
In a notable assertion, the investors claim that losing BoA and Webull would translate to a staggering 73% decline in Bakkt’s top-line revenue. Specifically, they cited that Webull contributed approximately 74% of Bakkt’s crypto services revenue during the majority of 2023 and that BoA accounted for around 17% of its loyalty services revenue from January through September 2024.
Highlighting the severity of the matter, Bakkt disclosed on March 17 that these two clients would not be renewing their contracts, which are due to expire in 2025. This announcement led to a dramatic decrease in Bakkt’s share value, plummeting over 27% within a mere 24 hours. The lawsuit accuses Bakkt of misrepresenting the stability and diversity of its revenue streams, asserting that the company’s fortunes were largely dependent on Webull’s contract.
As detailed in the suit, the plaintiffs argue, “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 unfolding situation signals potential ramifications for Bakkt, as additional law firms have indicated ongoing investigations regarding possible securities fraud, hinting at further class-action lawsuits on the horizon.
In an interesting twist, Bakkt’s stock saw a remarkable uptick of approximately 162% in November 2024, following reports that former U.S. President Donald Trump’s media company was contemplating an acquisition of Bakkt. However, as of April 2025, no formal agreement has been confirmed.
As the situation continues to develop, Bakkt’s stock priced at $8.15 at the time of this report reflects a more than 36% decline over the past month, illustrating the market’s reaction to the turmoil surrounding the company.
Stay tuned as more updates are anticipated regarding the impact of this lawsuit and the broader implications for Bakkt and the cryptocurrency market.
