Centralized Exchange Expands Presence in Europe
Backpack, a centralized cryptocurrency exchange (CEX) founded by former Alameda Research and FTX employees, has acquired FTX EU, the former European arm of the defunct FTX exchange. The acquisition was approved by the FTX bankruptcy court and the Cyprus Securities and Exchange Commission (CySEC), paving the way for Backpack to expand its footprint in the European Union.
Background on FTX EU
Before being acquired by Backpack, FTX EU was initially known as Digital Assets AG (DAAG), a Swiss company acquired by FTX in 2021 for $323 million. However, after the collapse of FTX in November 2022, FTX EU attracted many crypto businesses seeking to acquire it. Companies like Coinbase repeatedly attempted to acquire FTX Europe in 2022 and 2023.
Acquisition Details
The acquisition comes a few months after CySEC extended FTX EU’s suspension by another six months in late 2024. While prohibiting the exchange from offering services, the regulator still allowed FTX EU to complete transactions and return funds to clients.
As part of the deal, Backpack EU will take responsibility for distributing funds to FTX EU customers as part of the court-approved bankruptcy claims process. Backpack Exchange is committed to returning FTX EU customers’ funds as fast and as safely as possible, according to its CEO, Armani Ferrante.
"Customer restitution is a crucial step to rebuild trust and confidence in the industry," Ferrante added.
Timeline for Launch
After a forthcoming license re-activation, Backpack EU expects to go live in the first quarter of 2025. The exchange will provide further information on its support channel, such as how new users may sign up and how FTX EU customers can access their assets.
History of Ownership Changes
Backpack’s FTX EU acquisition marks another chapter in the long history of changing owners before and after the collapse of the global FTX exchange. FTX EU was sold back to its founders in 2024 for $32.7 million, marking a significant milestone in the exchange’s ownership changes.
Founders’ Background
Backpack was founded in 2022 by Solana developer Ferrante, who reportedly secured $20 million in funding from FTX and Jump Crypto to build the exchange. He started by launching the non-custodial Backpack Wallet.
Another Backpack co-founder, Tristan Yver, spent at least two years with FTX before leaving the company in May 2022, according to his LinkedIn. During FTX’s collapse in 2022, Backpack lost $14.5 million, or 88% of the company’s operating funds.
Expansion Plans
The acquisition marks a significant expansion for Backpack as it looks to increase its presence in the European market. With the newly acquired entity, Backpack EU will offer a suite of crypto derivative services across the EU, including perpetual futures.
By expanding into new markets and acquiring FTX EU, Backpack is positioning itself for growth and success in the competitive cryptocurrency exchange space. The company’s commitment to customer restitution and its expansion plans demonstrate its dedication to rebuilding trust in the industry.
Regulatory Environment
The acquisition also highlights the importance of regulatory compliance in the cryptocurrency space. CySEC’s approval of the deal underscores the need for exchanges to operate within the bounds of applicable laws and regulations.
As the regulatory environment continues to evolve, companies like Backpack are well-positioned to navigate these changes and thrive in the European market.
Conclusion
Backpack’s acquisition of FTX EU marks a significant milestone in the company’s expansion plans. With its commitment to customer restitution and its focus on rebuilding trust in the industry, Backpack is poised for success in the competitive cryptocurrency exchange space.
As the regulatory environment continues to evolve, companies like Backpack will be well-positioned to navigate these changes and thrive in the European market. The acquisition of FTX EU serves as a testament to the resilience and adaptability of players in the cryptocurrency space.
Sources
- Armani Ferrante’s LinkedIn profile
- Cointelegraph article shared on Jan. 7, 2025
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