Backpack Exchange Fortifies its Position in the European Crypto Market
In a strategic move to expand its influence within the European financial landscape, Backpack Exchange, a cryptocurrency trading platform founded by former associates of Sam Bankman-Fried’s ventures, has acquired the European branch of the now-defunct FTX exchange. This acquisition, valued at $32.7 million, marks a significant step for Backpack in enhancing its derivatives offering in Europe, a region witnessing a surge in the regulated crypto derivatives market.
Transfer of FTX EU’s Bankruptcy Claims
FTX EU was among the entities embroiled in bankruptcy proceedings after the 2022 collapse of the FTX exchange. Under the acquisition terms, Backpack, headquartered in Dubai, will oversee the distribution of court-sanctioned bankruptcy claims amounting to approximately €53 million ($55 million) to the affected customers of FTX EU.
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Initially, the FTX estate initiated legal proceedings to reclaim funds from FTX EU’s original proprietors. However, this lawsuit was abandoned following a settlement that enabled the unit’s transfer to its co-founders, Patrick Gruhn and Robin Matzke, who subsequently sold it to Backpack.
This acquisition is particularly notable as FTX EU possesses a MiFID II license, authorizing the provision of crypto derivatives trading within the European Union. The transaction has secured the green light from the Cyprus Securities and Exchange Commission, ensuring Backpack’s legal operation in the region.
Armani Ferrante, CEO of Backpack, highlighted the company’s commitment to prioritizing customer fund recovery post-acquisition. In a statement, he affirmed, “We will not engage with any EU user or execute trades until we ensure the return of customer funds.”
Emerging as a Prominent Player in Crypto
Since its establishment in 2022, Backpack has made significant strides in the crypto industry. Armani Ferrante, a former Alameda Research contributor and key figure in the development of the Solana blockchain, brings a wealth of experience to the firm. Co-founder Tristan Yver adds value with his background as a former FTX executive. Backpack has attained a virtual-asset service provider license in Dubai and is actively pursuing a license to operate in Japan, following a successful $17 million funding round last year, which valued the company at $120 million.
With the acquisition of FTX EU, Backpack is well-positioned to introduce regulated crypto derivatives products, including perpetual swaps—futures contracts without expiration dates—to the European Union.
The European regulated crypto derivatives market is becoming increasingly attractive to various crypto firms. This trend is exemplified by Coinbase Global Inc.’s recent acquisition of a Cyprus-based brokerage, which also secured a MiFID II license. “Derivatives constitute a substantial portion of crypto trading volume,” Ferrante noted, expressing excitement about the prospect of revitalizing the EU’s crypto derivatives trading landscape.
As the market evolves, companies like Backpack are poised to significantly influence the future of crypto trading by delivering innovative and regulated products that meet the growing demand.
Market Trends and Token Performance
Currently, the FTT token, native to the defunct exchange, is trading at $3, reflecting a nearly 11% decline amid broader market corrections.
