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(Bloomberg) -- Backpack Exchange, a crypto trading platform founded by one-time employees of Sam Bankman-Fried’s FTX and Alameda Research businesses, has acquired the former European entity of the failed FTX exchange for $32.7 million to expand its derivatives offerings in the region.
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FTX EU was one of the business units that ended up as part of the bankruptcy after Bankman-Fried’s firm collapsed in 2022. As part of the acquisition, Dubai-based Backpack will assume responsibility for distributing previously court-approved FTX bankruptcy claims of about €53 million ($55 million) to FTX EU customers.
The FTX estate had filed a lawsuit that sought to claw back millions of dollars from the original owner of FTX EU. The lawsuit was eventually dropped as part of a settlement that included reselling the unit to FTX Europe’s co-founders Patrick Gruhn and Robin Matzke. Backpack bought the business from the co-founders.
FTX EU has a MiFID II license that allows the exchange to offer crypto derivatives trading in the European Union. The transaction was approved by the Cyprus Securities and Exchange Commission, Backpack said.
The “top priority” for Backpack after the acquisition is to return customers’ funds as soon as February, according to Armani Ferrante, the chief executive officer of Backpack.
“We will not serve a single user, not serving a single trade in the EU until we have the ability to return customers’ funds,” Ferrante said in an interview. “With that said, it’s may be important to point out that there are other factors at play here. We are not the sole party. We have to work with the banks namely, which are holding the funds.”
Backpack was founded in 2022. Ferrante briefly worked at Alameda Research during its early days and later turned into a key developer of the Solana blockchain. Backpack’s co-founder, Tristan Yver, was a former executive at FTX. Backpack has gained a virtual-asset service provider license in Dubai and is seeking a license to serve the Japanese market. It raised $17 million last year at a valuation of $120 million.
The acquisition will allow Backpack to offer regulated crypto derivatives products including perpetual swaps, which are futures contracts that do not expire, in the European Union. The regulated crypto derivatives market in Europe has become the focus of many crypto firms. Coinbase Global Inc., for example, acquired the Cyprus-based unit of brokerage firm BUX, which secured the firm a MiFID II license as well.