TLDR
- Backpack Exchange, founded by ex-FTX/Alameda employees, acquired FTX EU for $32.7M
- Acquisition includes commitment to distribute funds owed to FTX EU customers
- Backpack plans to launch in Q1 2025 as sole regulated crypto derivatives provider in Europe
- Nasdaq ISE seeks SEC approval to 10x increase position/exercise limits on Bitcoin ETF options
- Proposed change due to growing IBIT trading volume/liquidity, still conservative vs other ETFs
Former employees of the bankrupt FTX exchange and Alameda Research trading firm have founded a new company called Backpack Exchange. In a deal valued at $32.7 million, Backpack has now acquired FTX’s European entity, FTX EU.
The acquisition, which has been approved by both the Cyprus Securities and Exchange Commission and the FTX bankruptcy court, includes a commitment from Backpack to distribute approximately €53 million ($55 million) in court-approved bankruptcy claims to affected FTX EU customers. Returning these customer funds is Backpack’s stated top priority.
FTX EU, formerly known as Digital Assets AG before being acquired by FTX in 2021 for $323 million, has been under suspension by Cyprus regulators since FTX’s collapse in late 2022. While restricted from providing services, the entity has continued processing transactions and returning client funds.
Backpack has acquired FTX EU and its MiFID II License.
Our first priority is to return all customer EURO funds on behalf of the FTX estate, followed by rolling out a full suite of spot, margin, and futures trading products.
Crypto perps trading is coming back to Europe
pic.twitter.com/ExxYFufZHj
— Backpack
(@Backpack) January 7, 2025
With the acquisition, Backpack gains control of FTX EU’s coveted MiFID II license. This will allow Backpack to offer regulated crypto derivatives trading, including perpetual futures contracts, to customers across the European Union.
Backpack CEO Armani Ferrante, a prominent Solana blockchain developer, said the company plans to launch its European operations in the first quarter of 2025. Their aim is to establish Backpack as the sole regulated provider of perpetual futures and other crypto derivatives products in Europe.
Ferrante noted that while competitors like Coinbase and Bitstamp have obtained derivatives licenses in the EU, they have not yet launched perpetual futures trading in the region. This potentially gives Backpack a first-mover advantage.
Backpack Exchange originally launched in 2022 with a non-custodial crypto wallet called Backpack Wallet. The company has since expanded into a full crypto trading platform.
In other crypto derivatives news, Nasdaq’s ISE options exchange recently submitted a proposal to the U.S. Securities and Exchange Commission seeking to increase the position and exercise limits for options on the iShares Bitcoin Trust ETF (IBIT) from 25,000 to 250,000 contracts.
ISE justified the proposed tenfold increase by pointing to the growing trading volume and liquidity of IBIT, currently the world’s largest Bitcoin ETF with $46.8 billion in assets. The exchange noted that even with the higher limit, IBIT options would only represent 2.89% of outstanding shares, a more conservative ratio than similar ETFs like SPDR Gold Shares (GLD) at 8.17% and iShares Silver Trust (SLV) at 4.8%.
The crypto industry is closely watching both Backpack’s European expansion plans and the fate of Nasdaq ISE’s proposal to boost Bitcoin ETF options trading in the U.S.
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