The cryptocurrency trading platform known as Backpack Exchange, established by ex-employees from FTX and Alameda Research, namely Armani Ferrante and Tristan Yver, has taken over FTX EU, which is the European division of the recently collapsed FTX.
Obtaining approval from both the FTX bankruptcy court and the Cyprus Securities and Exchange Commission (CySEC) represents a daring step towards re-establishing controlled cryptocurrency trading platforms throughout Europe.
Backpack Exchange Acquires FTX EU
As reported by Bloomberg, the startup Backpack secured a valuation of $120 million during its Series A funding round in early 2024. With this acquisition, the company aims to establish itself as a significant player within the European market. The agreement grants Backpack access to FTX EU’s MiFID II license, enabling them to provide an extensive range of cryptocurrency derivative products, such as perpetual futures.
This significant move is crucial because, at present, no authorized entity offers such derivatives in the European Union. Due to increased regulatory scrutiny, numerous offshore trading platforms are withdrawing from the market. Armani Ferrante, CEO of Backpack Exchange, emphasized the need for regulation to reestablish trust within the cryptocurrency sector.
Ferrante declared in a statement that obtaining a MiFID II license shows our commitment to reaching the most stringent regulatory requirements,” or simply, “Obtaining a MiFID II license underscores our dedication to adhering to the strictest regulatory norms,” as stated by Ferrante.
He mentioned that the goal of this acquisition is to offer secure and transparent cryptocurrency trading within the European market, which he referred to as currently underdeveloped. The platform intends to launch by Q1 of 2025, providing smooth compatibility with conventional payment methods like SEPA transfers and cost-effective wire payments in significant currencies.
Details regarding the process of welcoming new users and providing access to funds for FTX Europe customers will be shared shortly. Additionally, Backpack EU is set to distribute FTX bankruptcy claims that have been court-approved for FTX Europe clients, with a focus on Euro-based funds.
Rebuilding trust and confidence within the industry requires addressing customer issues, as Ferrante explained,” or simply, “Addressing customer issues is essential for rebuilding trust and confidence in the industry.
Implication for FTX Creditors Amid Bankruptcy Fallout
Obtaining FTX EU provides clarity on the allocation of funds linked to FTX’s bankruptcy proceedings. Sunil Kavuri, a FTX creditor advocate, inquired via Twitter about the potential impact of this transition on the priority of distribution for creditors like himself.
In simpler terms, Ferrante from Backpack explained that any unprocessed cryptocurrency withdrawal requests made by FTX EU users prior to bankruptcy will be part of the FTX bankruptcy case. These customers are advised to proceed with filing their claims directly to the FTX bankruptcy estate regarding these cryptocurrency holdings.
According to Ferrante, FTX EU has been bought out by the FTX bankruptcy estate, making it no longer a part of the company. Instead, clients can now retrieve their Euro funds directly from Backpack EU.
The Backpack administrator further clarified that specific emails containing comprehensive guidelines will shortly be dispatched to impacted customers regarding the timeline. As for when FTX EU users can receive their refunds, Ferrante mentioned that while Backpack is expected to be operational by February, the final decision doesn’t solely rest with the exchange.
Ferrante explained that we need to collaborate with other entities, such as banks, but their speed is not something we can control. However, rest assured, we’re doing everything possible with great urgency.
It’s worth mentioning that repayments were scheduled for early March. Furthermore, the purchase of FTX EU signifies another significant step in Backpack’s international growth. Earlier, the company had obtained a crucial license from the Dubai Virtual Assets Regulatory Authority (VARA). Collectively, these actions demonstrate their intention to operate in various regions worldwide.
Equipped with a MiFID II permit and robust regulatory structure, this backpack intends to establish a safe trading ecosystem, introducing groundbreaking products such as cryptocurrency derivatives along the way. By doing so, it may help fill a significant void in the European market as unregulated platforms begin to withdraw.
Moreover, the resurgence of FTX EU under the leadership of Backpack signals a promising development within Europe’s cryptocurrency industry. After the downfall of significant players such as FTX, which caused concern among investors, the reemergence under the Backpack brand may establish Europe as a center for compliant crypto transactions.
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2025-01-07 18:05