From Collapse To Comeback? Ex-FTX And Alameda Employees Acquire European Subsidiary

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To strengthen its position in the European market, the cryptocurrency trading platform Backpack Exchange (previously created by ex-employees of Sam Bankman-Fried’s FTX and Alameda Research) has purchased the European branch of the bankrupt FTX exchange for approximately $32.7 million.

Previously mentioned by Bloomberg, this acquisition is intended to broaden Backpack’s range of derivative products in a region witnessing growing interest and regulation in the crypto derivatives market.

FTX EU’s Bankruptcy Claims Transferred

Among the entities affected by the bankruptcy process following FTX’s exchange failure in 2022 was FTX EU. In the course of the acquisition agreement, the Dubai-based company Backpack will take on the task of distributing around €53 million ($55 million) in court-verified bankruptcy claims to the affected customers of FTX EU.

Initially, the FTX estate sought legal recourse to reclaim substantial funds from the founders of FTX EU. Yet, this lawsuit was eventually dismissed as part of a settlement agreement that paved the way for the transfer of the unit to its co-founders, Patrick Gruhn and Robin Matzke. Subsequently, they sold it to Backpack. (As a crypto investor, I’ve been following the developments regarding FTX.)

As a researcher, I find this acquisition significant because FTX EU possesses a MiFID II license, enabling them to facilitate cryptocurrency derivative trading within the boundaries of the European Union.

The Cyprus Securities and Exchange Commission has given its approval to the transaction, allowing Backpack to lawfully conduct operations within that region.

Armani Ferrante, CEO of Backpack, underscored that reimbursing customers is their utmost concern after the acquisition. In an interview, he expressed, “We won’t cater to any user or execute a single trade in the EU until we can refund our customers’ funds.

A Rising Star In Crypto? 

As a forward-thinking crypto investor, I’ve been captivated by the rapid rise of Backpack since its establishment in 2022. With my background in the industry, having worked at esteemed organizations like Alameda Research, and playing an integral part in shaping the Solana blockchain, Ferrante brings a wealth of invaluable expertise to this innovative venture.

Tristan Yver, one of the company’s co-founders, previously held an executive position at FTX. Backpack, our organization, has obtained a virtual asset service provider license in Dubai and is actively seeking approval to operate in Japan. Last year, we successfully raised $17 million, giving us a valuation of $120 million.

By purchasing FTX EU, Backpack now has the ability to provide regulated crypto derivative products throughout the European Union. These products include perpetual swaps – essentially futures contracts that don’t have an end date.

In simpler terms, the controlled market for crypto derivative products in Europe is growing more attractive to numerous cryptocurrency companies. This is shown by Coinbase Global Inc.’s latest purchase of a brokerage division based in Cyprus, and this acquisition also includes obtaining a MiFID II license.

In Ferrante’s words, “A significant portion of cryptocurrency trading is comprised of derivatives,” and he showed great excitement about the prospect of reintroducing derivative trading in cryptocurrencies within the European Union.

In the changing landscape of the market, pioneering companies such as Backpack are ready to significantly impact the development of cryptocurrency trading through their introduction of unique and compliant services that meet the expanding needs of consumers.

Currently, as I’m typing this, the token of the now-defunct exchange, FTT, is being traded for around $3. This is due to the broader market adjustment, which has resulted in a decline of approximately 11% in its value.

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2025-01-08 11:43