Backpack, a centralized crypto exchange (CEX) created by former Alameda Research and FTX personnel, has acquired FTX EU.
The acquisition approved by the FTX bankruptcy court and Cyprus Securities and Exchange Commission (CySEC) will allow Backpack Exchange to offer expanded cryptocurrency products and services in the EU region. This acquisition also transfers FTX EU’s bankruptcy claim to Backpack.
Reactivating Operations
Last year, CySEC imposed an operational suspension on FTX EU. While the restrictions prevented the firm from offering new services to its clients, it could still carry out client orders and initiate payout requests.
Backpack Exchange CEO Armani Ferrante stressed the importance of promptly and effectively handling FTX EU fund withdrawals to regain market trust. Moreover, reactivating its Euro licenses will allow Backpack EU to rebrand and resume its services in the region.
The firm also intends to offer its EU users perpetual futures and other crypto-related services.
FTX EU’s Background
In 2021, FTX acquired FTX EU, formerly Digital Assets AG, for $323 million. Despite the FTX debacle in November 2022, the European branch of FTX remained attractive to crypto businesses.
Companies like Coinbase showed interest in purchasing FTX EU between 2022 and 2023. However, the entity was sold back to its original owners in February 2024 for approximately $32.7 million.
The recent Backpack acquisition marks another ownership change. The regulatory troubles for FTX EU started when CySEC suspended FTX EU and later extended the suspension, forcing FTX EU to refund clients on several occasions.
The transfer of ownership to Backpack marks a notable milestone in resolving the legal and financial issues that followed the FTX collapse.
Backpack Exchange’s Renewed Vision
Backpack Exchange was established in 2021 by Armani Ferrante and Tristan Yver, who left FTX in May 2022. The firm started its operations in the crypto market as a non-custodial wallet solution.
Then, it secured $17 million in funding from top venture capitalists, especially Placeholder VC and Jump Crypto, for infrastructural development. Following the FTX collapse, the firm lost 88% of its operational cost ($14.5 million).
However, Backpack can now leverage the FTX EU’s facilities and become a big player in the European crypto market after obtaining the necessary approvals.
Disclaimer
This article is provided for information only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
