FTX EU, once a pivotal component of the now-defunct FTX empire, has embarked on a new journey under the ownership of Backpack Exchange. The acquisition, valued at $32.7 million, signifies more than a mere change in ownership—it’s poised to disrupt the European crypto market landscape. This strategic move comes at an opportune moment as European markets are increasingly relaxing their crypto regulations, with a projected surge in crypto users to an impressive 218.60 million by 2025.
What’s the Big Deal?
FTX EU was not just another player in the crypto arena; it was a significant force within Sam Bankman-Fried’s expansive trading empire. Sam Bankman-Fried, a renowned American entrepreneur and billionaire, has a storied career in the cryptocurrency industry. As the founder and former CEO of FTX, a leading cryptocurrency exchange, Bankman-Fried has made substantial contributions to the evolution of the crypto space with his expertise and innovative spirit. Hailing from Stanford, California, he was ranked 60th on the 2022 Forbes billionaires list, boasting a net worth of $24 billion.
Bankman-Fried began his career at Jane Street Capital, a trading firm specializing in international ETFs. In 2017, he left Jane Street to establish Alameda Research, a quantitative cryptocurrency trading firm. Notably, he executed an arbitrage trade in 2018, generating $25 million daily by capitalizing on the higher Bitcoin prices in Japan. Following a cryptocurrency conference in Macau, he founded FTX, which, as of July 2021, boasted an average daily trading volume of $10 billion and over a million users. FTX also committed to donating 1% of its revenue to charity, demonstrating Bankman-Fried’s dedication to social responsibility.
FTX EU held a MiFID II license under the Cyprus Securities and Exchange Commission (CySEC), enabling it to operate seamlessly within the European Union. Now, under the leadership of Backpack Exchange, founded by former FTX and Alameda Research employees, the focus is on leveraging this license to establish a dominant presence in the regulated crypto derivatives market across Europe.
Backpack Exchange’s Ambitious Plans
Armani Ferrante, the CEO of Backpack Exchange, has announced the submission of the exchange’s notification under Europe’s new Markets in Crypto Assets (MiCA) regulatory framework. If approved, Backpack Exchange aims to launch its operations in the first quarter of 2025. The company plans to offer an extensive suite of crypto derivatives, with a primary focus on becoming the sole regulated provider of perpetual futures within the European Union.
Ferrante emphasized the significance of restoring FTX EU customer funds as a priority before rolling out new services. Other firms such as Coinbase and Bitstamp have also acquired MiFID II licenses; however, none currently offer perpetual futures in the European Union. This presents Backpack Exchange with a unique opportunity to fill this gap and cater to the growing demand for regulated crypto derivatives.
Beyond New Customers: A Commitment to Existing Users
Backpack Exchange is not solely focused on attracting new customers. Ferrante has underscored the importance of returning funds to FTX EU’s existing users. Once this crucial step is addressed, the company will introduce its suite of products, with some features potentially launching later in the year.
The journey of Backpack Exchange has been noteworthy. The team, recognized for its contributions to the Solana ecosystem and successful NFT ventures, raised $17 million in funding last year. With the acquisition of FTX EU, they are poised to elevate their position in a fiercely competitive market.
The Future of Europe’s Crypto Scene
Europe’s crypto landscape is abuzz with activity, as firms like D2X and others vie for a share of the derivatives market. However, Backpack Exchange’s regulated approach and focus on perpetual futures position it as a potential standout player. In a crypto world that increasingly seeks stability and trust, Backpack Exchange’s bold move could set the stage for a new era of regulated trading in Europe.
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