Investors Sue Bakkt Over 73% Revenue Loss, 27% Share Drop

A group of investors in Bakkt Holdings, a cryptocurrency custody and trading firm, have initiated a class-action lawsuit against the company and its executives. The lawsuit alleges that Bakkt made false or misleading statements and failed to disclose crucial information regarding its revenue sources. The lead plaintiff, Guy Serge A. Franklin, has called for a jury trial in the US District Court for the Southern District of New York.

The investors claim that Bakkt's revenue was heavily dependent on a single contract with Webull, which accounted for 74% of its crypto services revenue through most of 2023 and 2024. Additionally, Bank of America contributed 17% of its loyalty services revenue from January to September 2024. The loss of these contracts is alleged to have resulted in a 73% loss in top-line revenue, significantly impacting the company's financial stability.

The lawsuit further alleges that Bakkt misrepresented the stability and diversity of its crypto services revenue, failing to disclose that this revenue was substantially dependent on Webull's contract. This lack of transparency is cited as a key factor in the investors' losses. The investors argue that Bakkt's actions and omissions led to a precipitous decline in the market value of the company's securities, resulting in significant losses and damages for the plaintiffs and other class members.

Bakkt disclosed on March 17 that Bank of America and Webull did not intend to renew their agreements with the firm, which are set to end in 2025. This announcement contributed to a more than 27% drop in the company's share price in the following 24 hours. The investors allege that Bakkt's executives, including senior adviser and former CEO Gavin Michael, CEO and president Andrew Main, and interim chief financial officer Karen Alexander, are responsible for these misrepresentations and omissions.

The lawsuit comes at a time when Bakkt's share price has been volatile, having surged roughly 162% in November 2024 following reports that then-US President-elect Donald Trump’s media company was considering acquiring the firm. As of April 2025, neither company has officially announced a deal. The investors' allegations highlight the risks associated with relying on a limited number of revenue sources and the importance of transparency in financial disclosures.

Other law offices have indicated that they are investigating Bakkt for securities law violations, suggesting that additional class-action lawsuits may be forthcoming. The lawsuit underscores the potential legal and financial repercussions for companies that fail to disclose critical information to their investors, particularly in the rapidly evolving cryptocurrency sector.