A little over two years ago, FTX, the second largest cryptocurrency exchange, abruptly closed its doors. Sam Bankman-Fried’s entire empire was forced to declare bankruptcy. This was the case for FTX’s European division, namely FTX.eu, which was launched in March 2022 on the island of Cyprus.
The Cypriot jurisdiction allowed the exchange to offer its services throughout the European Economic Area without having to apply for additional authorizations. Building on its success at the time, FTX had indeed decided to establish itself on the old continent and to religiously comply with the requirements of local regulators.
Backpack Exchange acquires FTX Europe
This subsidiary has just been acquired by Backpack Exchange, a regulated crypto exchange platform that also offers a non-custodial wallet, the keys of which are managed by users. It supports multiple blockchains, including Solana, Ethereum, Arbitrum, Base, Polygon, Optimism, and Eclipse, and integrates solutions for NFTs.
As the exchange explains in a press release sent to 01net, this acquisition "marks a major step in Backpack's international expansion and demonstrates its commitment to providing secure and regulated trading solutions throughout Europe."By relying on FTX Europe, Backpack will above all be able to provide tools for traders.
This European strategy is largely based on the MiFID license, already granted to FTX Europe. This license will allow Backpack to offer crypto derivative products on European territory. The exchange from Singapore emphasizes that Europe is a market "where no regulated crypto derivative product is currently available". Indeed, several internationally based platforms have been forced to abandon their derivatives products in recent years.
Like Backpack, ecosystem giants such as Coinbase have been working hard to offer derivatives products in Europe. Coinbase recently acquired the Cypriot branch of Bux, a brokerage firm, with a view to obtaining a MiFID license that will open the doors to Europe. Competition is likely to increase in the derivatives market, which represents 75% of cryptocurrency trading volume, according to Coinbase.
By acquiring FTX’s European subsidiary, Backpack is taking on the ambitions once displayed by Sam Bankman-Fried. The philanthropist indeed aimed to make FTX "one of the most regulated exchanges in the world."Backpack plans to offer its services to European traders before the end of the first quarter of 2025. In addition, the exchange will allow you to fund your account with euros by making instant transfers.
Note that Backpack was set up by... several former FTX executives. The exchange was in fact developed by Trek Labs, a start-up born in Dubai in 2023. Among the executives are Can Sun, FTX's former lawyer, Armani Ferrante, another FTX executive, and his wife, Claire Zhang, who was Can Sun's legal advisor at FTX.
FTX Europe Reimbursements
By taking control of FTX Europe, Backpack finds itself in charge of reimbursing victims of the European subsidiary of the FTX group. They were able to request a refund through a form that was put online during the summer of 2023.
After months of waiting, refunds will be issued as soon as possible, says Backpack. For the Singaporean firm, "reimbursing customers is an essential element in restoring confidence in the industry, and Backpack is committed to returning FTX EU customer funds as quickly and safely as possible." On its website, Backpack mentions a refund in the first half of the year.
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