FTX EU Acquisition by Backpack Exchange

FTX EU, the European wing of the collapsed crypto exchange, has been acquired by Backpack Exchange, following approvals from the FTX bankruptcy court and the Cyprus Securities and Exchange Commission.

Backpack Exchange will manage the distribution of court-approved FTX bankruptcy claims to FTX EU users. CEO Armani Ferrante emphasized that “Customer restitution is a crucial step to rebuild trust and confidence in the industry,” and added that Backpack is dedicated to quickly and safely returning funds to FTX EU customers.

Backpack, founded by ex-FTX and Alameda Research staff, was valued at $120 million during its early 2024 Series A financing round. The exchange acquired a MiFID II license for global expansion and earlier secured a significant license from the Dubai Virtual Assets Regulatory Authority.

The new entity, Backpack EU, will provide crypto derivatives, including perpetual futures, across the EU. It is set to launch in the first quarter of 2025 and will support SEPA payments and wire transfers in leading European currencies.

This acquisition aligns with the EU’s Markets in Crypto-Assets (MiCA) regulation aimed at establishing standards and protecting consumers in the virtual asset sector. With numerous international exchanges leaving the EU, Ferrante notes that achieving MiFID II licensing underscores Backpack’s commitment to high regulatory standards, ensuring transparent and secure crypto trading in a previously underserved market.

Before founding Backpack, Ferrante raised $20 million for Coral, a crypto infrastructure company responsible for Backpack’s tech stack. Most of those funds were lost when FTX collapsed. Coral was co-founded alongside Can Sun, FTX’s former general counsel, who testified against Sam Bankman-Fried, the now-convicted ex-CEO of FTX.

FTX filed for bankruptcy in November 2022. In November 2023, Bankman-Fried was convicted of multiple charges, including wire fraud, and sentenced to 25 years in prison.