Bakkt Holdings Sued in Federal Court Over Crypto Services Revenue Misrepresentations
On Wednesday, April 2, 2025, Guy Serge A. Frankin filed a class action complaint in the US District Court for the Southern District of New York against Bakkt Holdings, Inc., its former CEO Gavin Michael, current CEO Andrew Main, and CFO Karen Alexander. The lawsuit, representing investors who purchased Bakkt securities between March 25, 2024, and March 17, 2025, alleges violations of the Securities Exchange Act of 1934.
Bakkt, a Delaware-based technology company focused on cryptocurrency trading and storage software, is accused of making false and misleading statements during the specified period. The complaint claims the company misrepresented the stability and diversity of its crypto services revenue, failed to disclose its heavy reliance on a single contract with Webull Pay LLC, and overstated its ability to maintain key client relationships. These actions, according to the plaintiff, led to significant financial losses for investors when the truth was revealed.
The lawsuit highlights Bakkt’s acquisition of Apex Crypto LLC in April 2023, renamed Bakkt Crypto, which significantly boosted its crypto services revenue. By the end of 2023, crypto services accounted for 93.2% of the company’s total revenue, with Webull contributing 74% of that segment. Additionally, Bakkt operates a loyalty solutions segment for point redemption and fulfillment, including travel services.
On March 17, 2025, Bakkt announced that Webull would terminate its commercial agreement effective June 14, 2025, and Bank of America would end its loyalty services contract effective April 22, 2025. Bank of America represented 17% of Bakkt’s loyalty services revenue for the nine months ending September 30, 2024. These terminations are projected to result in a 73% loss in the company’s top-line revenue. Following this disclosure, Bakkt’s share price dropped 27.3%, closing at $9.33 per share on March 18, 2025, with unusually high trading volume. On March 20, 2025, the company stated that the loss of Webull raised substantial doubt about its ability to meet financial obligations for the next 12 months.
The complaint alleges that during the class period, Bakkt’s public statements, including press releases and SEC filings, painted an overly positive picture of its financial health and growth prospects. For instance, the company’s 2023 annual report and quarterly filings in 2024 emphasized significant revenue growth driven by the Bakkt Crypto acquisition and touted an extensive client network across industries. However, these statements allegedly concealed the company’s dependence on Webull and vulnerabilities in its client relationships.
Frankin, who purchased Bakkt shares multiple times between June 12, 2024, and January 23, 2025, seeks to represent a class of investors who suffered damages due to the alleged misrepresentations. The lawsuit claims that Bakkt’s securities traded at artificially inflated prices, reaching a high of $32.44 per share on December 16, 2024, before the disclosures caused significant declines. The plaintiff asserts that the defendants knowingly or recklessly disseminated false information, violating federal securities laws.
The lawsuit invokes Sections 10(b) and 20(a) of the Exchange Act, along with SEC Rule 10b-5, accusing the defendants of engaging in a scheme to deceive investors. It seeks compensatory damages for the class, along with legal fees and other costs, and demands a jury trial. The plaintiff argues that the market for Bakkt’s securities was efficient, with the company’s shares listed on the New York Stock Exchange under the ticker BKKT, and that investors relied on the integrity of the market price when purchasing securities.
Please contact BlockTribune for access to a copy of this filing.
