FTX Contests Backpack Exchange's Assertion Regarding Acquisition of FTX EU Assets
In a surprising turn of events, a group called Backpack has claimed to have acquired FTX EU, the European division of the troubled cryptocurrency exchange FTX, in January 2025. However, FTX disputes the legitimacy of this acquisition, leading to an ongoing ownership dispute.
According to Backpack, they acquired FTX EU for $32.7 million, taking control of the license and the responsibility to repay creditors €53 million. They have launched services to compensate former FTX EU clients, allowing creditors to sell their claims and redeem balances after KYC verifications.
However, FTX maintains that the Cypriot unit (FTX EU) is still owned by former insiders of FTX Europe who do not legally possess it. The company asserts that Backpack lacks court approval and authorization to distribute funds to FTX customers.
The acquisition was reportedly finalized in June 2024 following regulatory approval from the Cyprus Securities and Exchange Commission (SCC). However, FTX claims that share transfers to the original founders have not been completed, and the FTX Recovery Trust is seeking court approval concerning disputed claims.
It is important to note that the court-approved process of returning funds to FTX customers does not involve Backpack. The reimbursement process for former FTX EU users will be overseen by Backpack under the leadership of Armani Ferrante, CEO of Backpack, but FTX did not grant Backpack the authority to reimburse any former clients, including FTX EU users.
The transaction to sell FTX EU to certain former insiders of FTX Europe was supported by FTX creditors, but the Delaware Bankruptcy Court never approved the transaction. The deal was approved by the bankruptcy court in March, and the transaction closed in May, with the proceeds going to the FTX estate.
The FTX reorganization plan went into effect on January 3, with initial payments to creditors set to occur within 60 days of that date. The company is now awaiting the transfer of shares in FTX EU, which will be renamed Backpack EU.
FTX disclaims any responsibility for the accuracy or completeness of any information in Backpack's press release, website, or other communications. Armani Ferrante, CEO of Backpack, emphasized that FTX holds no responsibility for compensating any former users of its European platform.
In conclusion, while Backpack presents itself as having the legal authority to compensate former clients of FTX EU, FTX contests this position, stating Backpack’s acquisition lacks proper court authorization and formal ownership transfer. The ongoing dispute between the two parties is likely to continue until a resolution is reached.
- In response to Backpack's acquisition of FTX EU, FTX argues that the deal lacks court approval and formal ownership transfer, making Backpack's claim to compensate former clients questionable.
- The Delaware Bankruptcy Court never approved the transaction to sell FTX EU to certain former insiders of FTX Europe, contradicting Backpack's assertion of having obtained the European division of FTX legitimately.
