This acquisition, approved by the FTX Bankruptcy Court and the Cyprus Securities Commission (CySEC), is a bold move to reintroduce regulated crypto trading services in Europe.
Backpack Exchange acquires FTX EU
According to Bloomberg, the Backpack company reached a valuation of $120 million in its Series A funding round in early 2024. With this acquisition, the company positions itself as a key player in the European crypto market. This agreement now allows Backpack to leverage FTX EU’s MiFID II license to offer a range of cryptocurrency derivatives products, including perpetual futures contracts.
This is an important step, as no regulated entity currently offers this type of derivative product within the EU. Many offshore platforms are leaving the market due to regulatory restrictions. Armani Ferrante, CEO of Backpack Exchange, however, stressed the importance of regulation to rebuild trust in the crypto industry.
“Becoming a MiFID II approved entity demonstrates our commitment to upholding the highest regulatory standards,” Ferrante said in a press release.
He added that this acquisition of FTX UE aims to provide secure and transparent crypto trading to the European market, which he described as “underserved.” The platform plans to launch its services in the first quarter of 2025 and aims to offer seamless integration with traditional payment systems. These systems include transfers from the Single Euro Payments Area (SEPA), including France, and low-cost transfer payments in its main currencies.
Further details on onboarding new users and facilitating access to funds for FTX EU customers will be announced soon. It is worth noting that Backpack EU will also distribute court-approved FTX bankruptcy claims to FTX EU customers. However, it will focus on funds denominated in euros.
“Customer restitution is a crucial step in rebuilding trust and credibility in the industry,” Ferrante added.
What are the implications for bankruptcy victims?
The acquisition of FTX EU also helped clarify the point on the distribution of funds related to the FTX bankruptcy. FTX creditor activist Sunil Kavuri asked on X (Twitter) how this change would affect their distribution preference.
Backpack’s Ferrante explained that the crypto (not Euro) claims of FTX EU customers who had pending crypto withdrawals at the time of the bankruptcy remain within FTX’s bankruptcy estate. For these crypto claims, clients must therefore continue to assert their rights directly with the FTX entity.
“FTX EU was sold by and is no longer part of the FTX bankruptcy estate. Customers will only be able to claim their funds in euros directly from Backpack EU,” explained Ferrante.
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The Backpack executive also indicated that emails with detailed instructions would soon be sent to affected customers. As for when FTX EU users can expect their refunds, Ferrante said that while Backpack will be ready by February, third parties will be able to influence those timelines.
“We have to work with other parties (like banks) and we cannot guarantee their speed. We are working with everyone with the greatest urgency,” assured Ferrante.
Interestingly, refunds had been scheduled for early March. Meanwhile, the acquisition of FTX EU marks another significant milestone in Backpack’s global expansion, having previously secured a key license from the Dubai Virtual Assets Regulatory Authority (VARA).
Backpack, with its MiFID II license and a seemingly solid regulatory framework, now appears to be seeking to fill a certain void left in the European market as unregulated platforms withdraw.
Finally, following the high-profile collapse of FTX, which shook investor confidence, this reopening under the Backpack brand could position Europe as a center of regulated crypto activity.
Moral of the story: Cut off the head of one crypto company and ten others will grow back.
Disclaimer
Disclaimer: In accordance with The Trust Project guidelines, BeInCrypto is committed to providing unbiased and transparent information. This article aims to provide accurate and relevant information. However, we encourage readers to verify the facts on their own and consult a professional before making any decision based on this content.
