In a significant development in the cryptocurrency exchange landscape, 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. This 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.
Acquisition Approval and Future Plans
The acquisition comes a few months after CySEC extended FTX EU’s suspension by another six months in late 2024. While prohibiting the exchange from offering services, the regulator still allowed FTX EU to complete transactions and return funds to clients. 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.
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. After a forthcoming license re-activation, Backpack EU expects to go live in the first quarter of 2025. 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.
History of FTX EU’s Changing Owners
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.
Eventually, FTX agreed to sell FTX EU back to its founders for $32.7 million in February 2024. This acquisition marks another chapter in the long history of its changing owners before and after the collapse of the global FTX exchange in November 2022.
Backpack’s Founding and Growth
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. Before founding the company, Ferrante also created Anchor, a major Solana developer tool and security protocol.
Another Backpack co-founder, Tristan Yver, spent 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 88% of the company’s operating funds. The firm has since continued operations with minimal funding.
Future Prospects for Backpack EU
With this acquisition, Backpack is poised to expand its presence in the European Union, offering a suite of crypto derivative services across the region. Perpetual futures will be among the services offered by Backpack EU, according to the company’s announcement shared with Cointelegraph on January 7.
The exchange’s commitment to returning FTX EU customers’ funds as fast and safely as possible is a crucial step in rebuilding trust and confidence in the industry. As Backpack EU prepares for its launch in the first quarter of 2025, it will be interesting to see how this new entity performs in the competitive cryptocurrency exchange market.
Timeline of Events
- November 2022: FTX collapse
- 2023: Coinbase attempts to acquire FTX Europe
- Late 2024: CySEC extends FTX EU’s suspension by another six months
- February 2024: FTX agrees to sell FTX EU back to its founders for $32.7 million
- January 7, 2025: Backpack announces the acquisition of FTX EU and plans to launch a suite of crypto derivative services across the European Union in Q1 2025
Conclusion
The acquisition of FTX EU by Backpack marks an important milestone in the company’s expansion plans. With its commitment to returning FTX EU customers’ funds as fast and safely as possible, Backpack is well-positioned to rebuild trust and confidence in the industry. As the cryptocurrency exchange market continues to evolve, it will be interesting to see how this new entity performs and whether it can become a major player in the region.
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