The New York Stock Exchange (NYSE) has issued a warning to Bakkt, a crypto custody and trading platform, stating that it risks being delisted if its average closing share price does not rise above $1.

On March 13, Bakkt announced that the NYSE had informed them of their non-compliance with the exchange’s listing rules. Over the past 30 days of trading, Bakkt’s share price has closed below $1 on average. Despite closing at 60 cents on March 13, an increase of 2.8% for the day, Bakkt has experienced a significant drop of nearly 42% over the month from its previous level above $1.

Bakkt had reached a high of over $40 in late October 2021 before its recent decline. The platform last traded above $1 on Feb. 28 but experienced a sharp decline the following day.

To address this issue, Bakkt plans to rectify the stock price deficiency and meet the NYSE standard for compliance. One potential solution, pending shareholder approval, is a reverse stock split, which aims to increase the price of existing shares by combining them. Bakkt has six months to achieve compliance and can regain it at any time within that period by maintaining a $1 share price on the last trading day of any calendar month and an average share price of at least $1 over the preceding 30 trading days.

Bakkt, majority-owned by Intercontinental Exchange (ICE), the parent company of NYSE, was founded in 2018. Despite its listing on the NYSE in October 2021, the platform has faced challenges. Bakkt initially positioned itself as a platform for institutional crypto transactions and had a retail-facing app that was ultimately shut down in February 2023 due to lackluster performance in a competitive market.

Having reported net losses for eight consecutive quarters, Bakkt disclosed concerns in early February regarding its financial sustainability over the next year. To address this, the platform received regulatory approval on Feb. 14 to issue $150 million in new shares to raise capital.

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