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Backpack Exchange acquires FTX EU: Efforts to revive from the ashes?
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Will the FTX EU exchange be able to revive at the hands of those who were once associated with FTX and Alameda?
After a shocking collapse in late 2022, FTX EU — the European branch of the FTX exchange — has found a new owner: Backpack Exchange.
The acquisition was approved by the FTX bankruptcy court and the Cyprus Securities and Exchange Commission on January 7, 2025, opening a new chapter for FTX EU.
It is noteworthy that the Backpack Exchange was founded by former employees of FTX and Alameda Research. This made the acquisition even more attention-grabbing and raised questions about the Backpack Exchange's motives and ability to succeed.
According to the official announcement, one of the most important tasks of the Backpack Exchange is to deal with the aftermath of the FTX crash, which includes refunds to FTX EU users.
Reimbursing customers is an important step towards rebuilding trust in the industry. Backpack is committed to returning money to FTX EU users as quickly and safely as possible.
However, given the association with FTX and Alameda, does Backpack Exchange have the credibility and capacity to deliver on this promise? This is a question that the investor and user community is very concerned about.
In addition to refunding users, Backpack Exchange also holds new plans for FTX EU.
It is expected that in the first quarter of 2025, FTX EU will be relaunched under the name Backpack EU, offering cryptocurrency derivatives products, including perpetual futures contracts, across the European Union. Backpack EU will support SEPA (Single Euro Payments Area) payments and transfers in major European currencies.
The move shows Backpack Exchange's ambition to conquer the European market, especially as the EU's Cryptocurrency Asset Market (MiCA) regulation begins to take effect, creating a clearer legal framework for crypto-related activities.
To realize its ambitions, Backpack Exchange has applied for a MiFID II license. This is an important license that allows companies to provide financial services in the European Union.
While many international exchanges are leaving the EU, becoming a MiFID II licensed entity demonstrates our commitment to meeting the highest regulatory standards and is an important step towards bringing a secure, transparent cryptocurrency trading service to the European market.
Despite certain advantages, Backpack Exchange still faces many challenges. The “shadow” of FTX and Alameda can affect the credibility and trust of users towards Backpack Exchange. Besides, the cryptocurrency market in Europe is increasingly competitive with the emergence of many large exchanges.
In early 2024, Backpack Exchange raised $17 million in a Series A funding round, with a valuation of $120 million at the time.
The CEO of Backpack Exchange, Armani Ferrante, is a former Alameda engineer. He founded the crypto infrastructure company Coral and raised $20 million from major investment funds such as Jump Crypto and FTX Ventures. However, much of this money was lost when FTX collapsed.
Backpack Exchange co-founder Can Sun is FTX's former general counsel and who testified against Sam Bankman-Fried, the former CEO of FTX, who was sentenced to 25 years in prison for multiple fraud-related charges.
The acquisition of FTX EU by Backpack Exchange is a remarkable event in the cryptocurrency market. This is both an opportunity for FTX EU to revive and a major challenge for Backpack Exchange. Can Backpack Exchange overcome the difficulties and succeed in the European market?
