Flow of Funds

Bakkt categorizes fund flows into distinct models to meet the varied needs of its clients. This guide helps clients identify which fund flow framework best aligns with their platform.

Funding Models

Bakkt Marketplace — clients use Bakkt's fiat onramps to fund customer trades; Bakkt handles all fiat movement. (Requires the Fiat Funding Onramp integration, which is outside the scope of the BakktX API.)
Net Settlement — clients manage their own fiat onramps via a private Banking-as-a-Service (BaaS) provider. Daily settlement happens on a net basis at 9:00 AM Central Time.
Apex Clearing — for clients with brokerage accounts, fiat funding routes through the brokerage account at Apex Clearing.

Key Components

Bakkt Best-Bid-Offer (BBO) — aggregates and refreshes pricing across liquidity providers to identify the best current bid and offer.
Bakkt Order Management System (OMS) — processes order execution and fund-movement requests, applying risk controls (minimum order value, holdings check, marketability via BBO).
Bakkt Trade System (BTS) — our proprietary ledgering technology. It accurately tracks your individual balance within the pooled omnibus accounts held at our partner banks.
Bakkt Financial Solutions I, LLC (BFS) — the entity handling digital asset trading.
FBO ("For Benefit Of") — a special financial account where funds are received and held on behalf of a third party. Customer fiat funds are consolidated into a single FBO account with individual ledger entries for each customer.
Commission Models — Markup (commission included in the price) and Trade Fee (transparent commission itemised separately).
Reconciliation — clients receive cash activity and cash balance reports for full visibility into cash transactions.
Immediate Trade Execution — trades execute immediately; cash calls for executed trades are processed asynchronously and retried twice daily. Failures fall into the Aged TPJ File.
Buying Power — it is the client's responsibility to manage customer buying power using the Aged TPJ File Bakkt delivers via S3. This file contains all unsuccessful TPJ transactions and is essential for accurate buying-power adjustments.

Flow Types

Each funding model is made up of several internal flows:

Flow	Description
Trade Flow	From customers receiving live market data through order placement and final execution.
Settlement Flow	Money movement between the customer FBO account and the Bakkt Business account to settle trades.
Customer Funding Flow	Customer moves funds from a linked bank account into the digital asset trading account.
Net Settlement Flow	Daily reconciliation process where all parties review trade reports, confirm transactions, and settle balances in a single net money movement.

Which Model Applies?

Using Bakkt's fiat onramp for customer trades → Bakkt Marketplace. Covers Trade, Settlement, and Customer Funding flows.
Bringing your own BaaS / fiat funding rails → Net Settlement. Covers Trade Flow and Net Settlement Flow; clients operate their own Settlement and Customer Funding flows.
Clearing via Apex → Apex Clearing. Covers Trade, Settlement, and Customer Funding flows routed through Apex.

Info: Contact [email protected] to confirm the appropriate funding model for your integration and to receive the detailed flow-of-funds diagrams for your model.