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Backpack Exchange, the cryptocurrency trading platform founded by former FTX and Alameda Research employees Armani Ferrante and Tristan Yver, has acquired FTX EU, the European arm of the now-bankrupt FTX.
This transaction, approved by the FTX bankruptcy court and the Cyprus Securities and Exchange Commission (CySEC), marks a bold move to reintroduce regulated cryptocurrency trading services across Europe.
Backpack Exchange Buys Back FTX EU
According to Bloomberg, Backpack reached a value of 120 million USD in a Series A funding round in early 2024. With this acquisition, the company is positioning itself as an important factor in the European market. The agreement allows Backpack to leverage FTX EU’s MiFID II license to offer a comprehensive suite of crypto derivatives tools, including perpetual futures contracts.
This is an important step as there is currently no regulated entity offering such derivatives within the EU. Many offshore exchanges are withdrawing from the market due to regulatory raids. Armani Ferrante, CEO of Backpack Exchange, emphasized the importance of regulatory compliance in rebuilding trust in the cryptocurrency industry.
“Becoming a licensed entity under MiFID II demonstrates our commitment to meeting the highest regulatory standards,” said Ferrante. speak in a press release.
He added that the acquisition aims to provide secure and transparent cryptocurrency trading to the European market, which he described as “underserved.” The platform is expected to launch in Q1 2025, offering seamless integration with traditional payment systems such as SEPA transfers and low-cost wire payments in major currencies.
Further details on registering new users and facilitating financial inclusion for FTX EU customers will be announced soon. Notably, Backpack EU will also distribute FTX’s court-approved bankruptcy claims to FTX EU clients, however will focus on euro series denomin funds.
“Refunding customers is an important step in rebuilding trust and confidence in the industry,” Ferrante added.
Impact on FTX Creditors Amid Bankruptcy Crisis
The acquisition of FTX EU also clarifies the distribution of funds related to FTX’s bankruptcy. FTX creditor activist Sunil Kavuri asked on X (Twitter) how this change will affect their allocation priorities.
Backpack’s Ferrante clarified, saying that the crypto claims (other than Euros) of FTX EU customers with pending crypto withdrawals in bankruptcy still belong to FTX’s bankruptcy assets. For these cryptocurrency requests, customers should continue to track requests directly to FTX assets.
“FTX EU has been sold by the FTX bankruptcy estate and is no longer part of the estate. Customers will only be able to request euro funds directly from Backpack EU,” Ferrante explain.
Backpack executives also said emails with detailed instructions will be sent to affected customers soon. As for when FTX EU users can expect to receive their refunds, Ferrante said that while Backpack will be ready in February, this is not entirely dependent on the exchange’s decision.
“We have to work with other parties (like banks) and we cannot guarantee how fast they will be. We are working with everyone with the highest level of urgency,” Ferrante commit.
It’s worth noting that refunds are scheduled to begin in early March. Meanwhile, the acquisition of FTX EU marks a milestone in Backpack’s global expansion. The company had previously received a key license from the Dubai Digital Assets Authority (VARA). Overall, this demonstrates the company’s ambition to operate across multiple jurisdictions.
Backpack, equipped with a MiFID II license and a solid regulatory framework, aims to create a secure trading environment while introducing innovative products such as crypto derivatives. The move could address a key gap in the European market as unregulated exchanges retreat.
Additionally, the recovery of FTX EU under the management of Backpack marks a positive step for the cryptocurrency industry in Europe. After the collapse of major firms like FTX, which shocked investor confidence, reopening under the Backpack brand could position Europe as a hub for regulated crypto activity.
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