Backpack Acquires FTX EU, Targets Europe’s Underserved Market

Backpack exchange, a cryptocurrency trading platform founded by former FTX and Alameda Research employees Armani Ferrante and Tristan Yver, has acquired FTX EU, the European arm of the now-defunct FTX.

The acquisition, approved by the FTX bankruptcy court and the Cyprus Securities and Exchange Commission (CySEC), signals a bold move to reintroduce regulated crypto trading services across Europe.

Backpack Exchange Acquires FTX EU

According to Bloomberg, Backpack achieved a $120 million valuation during its Series A financing round in early 2024. With this acquisition, the firm is positioning itself as a key player in the European market. The deal allows Backpack to leverage FTX EU’s MiFID II license to offer a comprehensive suite of cryptocurrency derivatives, including perpetual futures.

This is an important step, as no regulated entity currently provides such derivatives in the EU. Many offshore exchanges are exiting the market due to regulatory crackdowns. Armani Ferrante, CEO of Backpack Exchange, highlighted the importance of regulation in rebuilding trust within the crypto industry.

“Becoming a MiFID II-licensed entity demonstrates our dedication to meeting the highest regulatory standards,” Ferrante stated in a press release.

He added that the acquisition aims to provide secure and transparent crypto trading to the European market, which he described as “underserved.” The platform plans to go live in Q1 of 2025, offering seamless integration with traditional payment systems. Such systems include Single Euro Payments Area (SEPA) transfers and low-cost wire payments in major currencies.

Further details on onboarding new users and facilitating access to funds for FTX EU customers will be announced soon. Noteworthy, Backpack EU will also distribute court-approved FTX bankruptcy claims to FTX EU customers. Nevertheless, it will focus on euro-denominated funds.

“Customer restitution is a crucial step to rebuild trust and confidence in the industry,” Ferrante added.

Implication for FTX Creditors Amid Bankruptcy Fallout

The acquisition of FTX EU also clarifies the distribution of funds tied to FTX’s bankruptcy. FTX creditor activist Sunil Kavuri asked in an X (Twitter) how the change would affect their distribution preference.

Backpack’s Ferrante clarified, saying that the crypto claims (not Euros) of FTX EU customers who had pending crypto withdrawals at the time of the bankruptcy remain with the FTX bankruptcy estate. For these crypto claims, customers should continue with their claims directly with the FTX estate.

“FTX EU was sold by the FTX bankruptcy estate and is no longer part of the estate. Clients will only be able to claim their euro funds directly from Backpack EU,” Ferrante explained.

The Backpack executive also indicated that emails with detailed instructions would soon be sent to affected customers. On when FTX EU users can expect their repayments, Ferrante said that while Backpack will be ready by February, it is not solely up to the exchange’s discretion.

“We have to work with other parties (like banks) and we can’t guarantee how fast they will be. We are working with everyone with maximum urgency,” Ferrante assured.

Of note is that repayments had been planned for the beginning of March. Meanwhile, the acquisition of FTX EU marks another milestone in Backpack’s global expansion. The company had previously secured a key license from the Dubai Virtual Assets Regulatory Authority (VARA). Taken together, these reflect its ambition to operate across multiple jurisdictions.

Backpack, armed with its MiFID II license and strong regulatory framework, aims to create a secure trading environment while introducing innovative products like crypto derivatives. This move could address a critical gap in the European market as unregulated exchanges retreat.

Additionally, the revival of FTX EU under Backpack’s management marks a positive step for the cryptocurrency sector in Europe. Following the collapse of major players like FTX, which shook investor confidence, the reopening under Backpack’s brand could position Europe as a hub for regulated crypto activity.