Acquisition Background
Backpack, a centralized cryptocurrency exchange (CEX) founded by former Alameda Research and FTX employees, has acquired FTX EU, the former European arm of the defunct FTX exchange. The acquisition was approved by the FTX bankruptcy court and the Cyprus Securities and Exchange Commission (CySEC), paving the way for Backpack to expand its footprint in the European Union.
Customer Restitution
The company’s new European entity will offer a suite of crypto derivative services across the EU, including perpetual futures, as part of an announcement shared with Cointelegraph on Jan. 7. As part of the deal, Backpack EU will take responsibility for distributing funds to FTX EU customers as part of the court-approved bankruptcy claims process.
Post-Acquisition Timeline
Backpack Exchange is committed to returning FTX EU customers’ funds as fast and as safely as possible, according to its CEO, Armani Ferrante. ‘Customer restitution is a crucial step to rebuild trust and confidence in the industry,’ Ferrante added. The exchange will provide further information on its support channel, such as how new users may sign up and how FTX EU customers can access their assets.
FTX EU’s History
After a forthcomings_license re-activation, Backpack EU expects to go live in the first quarter of 2025. FTX EU was sold back to its founders in 2024, marking another chapter in the long history of its changing owners before and after the collapse of the global FTX exchange in November 2022.
Founding and Ownership
FTX EU was initially known as Digital Assets AG (DAAG), a Swiss company acquired by FTX in 2021 for $323 million. As part of FTX’s Chapter 11 filing in the United States, FTX EU has attracted many crypto businesses seeking to acquire it. Companies like Coinbase repeatedly attempted to acquire FTX Europe in 2022 and 2023.
Regulatory Context
Eventually, FTX agreed to sell FTX EU back to its founders for $32.7 million in February 2024. Backpack was founded in 2022 by Solana developer Ferrante, who reportedly secured $20 million in funding from FTX and Jump Crypto to build the exchange. He started by launching the non-custodial Backpack Wallet.
Founding Team
Backpack co-founder Armani Ferrante is a key figure, while Tristan Yver, at least two years with FTX before leaving the company in May 2022, according to his LinkedIn profile. During FTX’s collapse in 2022, Backpack lost $14.5 million, or 89% of its portfolio value.
Regulatory Approvals
The acquisition process and regulatory approvals by CySEC and the bankruptcy court were key considerations for Backpack’s expansion into Europe, ensuring compliance with regional regulations while maintaining operational integrity.
Company Overview
Backpack Exchange aims to provide a secure and efficient platform for cryptocurrency trading, focusing on derivative instruments like perpetual futures. With the acquisition of FTX EU, Backpack seeks to tap into a growing European market, reinforcing its position as a leader in decentralized finance (DeFi).
Key Features:
- Secure Token Storage: Ensures safekeeping of user assets.
- Fiat Support: Allows conversion from and to fiat currencies, enhancing accessibility.
- Collaborative Governance: Involves community members in decision-making processes.
Legal Considerations:
The sale process involved complex legal transactions, including the resolution of bankruptcy claims. This ensures that all interests are transferred clearly, minimizing operational disruptions.
Community Engagement:
Backpack plans to engage its community through regular updates and transparency about platform developments, fostering trust and user retention.
In summary, Backpack Exchange’s acquisition of FTX EU is a strategic move to expand into the European market with a focus on customer restitution and regulatory compliance. The company is committed to maintaining operational standards while adapting to new markets, ensuring a smooth transition post-acquisition.
