Backpack Acquires FTX EU for $32.7 Million, Expanding European Presence

In a significant move, Backpack, a popular crypto wallet and exchange among Solana users, has acquired FTX EU for $32.7 million. The acquisition provides Backpack with access to over 110,000 former FTX EU users and the European regulatory license, enabling the company to offer perpetual futures trading to European users.

Strategic Acquisition and Regulatory Compliance

Backpack CEO Armani Ferrante, a former Alameda Research employee, stated that the deal was signed in April 2024, followed by an eight-month due diligence process with regulators. As a result of the acquisition, Backpack will be responsible for distributing bankruptcy claims to FTX EU’s former customers. The company’s co-founder, Tristan Yver, previously held the position of head of strategy at FTX US.

Connection to Solana and FTX

The acquisition is notable due to FTX’s historical connection to Solana, having built its Serum DEX on the network in 2020. This move helped raise Solana’s profile among crypto investors in its early days. Backpack has been open about its connection to FTX and is positioning the acquisition as a means to facilitate the return of funds to FTX EU users.

Key Benefits and Challenges

While the acquisition may seem surprising at first, given FTX’s lack of staff and proprietary technology, the deal offers several benefits to Backpack. The most significant advantage is the acquisition of FTX’s MiFID II license, allowing Backpack to offer trading services, including perpetual futures, in Europe. However, the company must now navigate the process of distributing bankruptcy claims, a new responsibility.

Market Opportunity and Competition

Europe is a substantial trading market, with a significant portion of crypto trading volume coming from perpetual futures. According to Ferrante, there is currently a lack of compliant crypto perpetual futures offerings in Europe. This presents a lucrative opportunity for Backpack, although the company will face competition from established players like Coinbase, which acquired an EU MiFID II entity last year and plans to expand its derivatives offering in the region.

Conclusion

In summary, Backpack’s acquisition of FTX EU for $32.7 million marks a significant expansion of the company’s European presence. The deal provides access to over 110,000 users, a European regulatory license, and the opportunity to offer perpetual futures trading. While challenges lie ahead, including the distribution of bankruptcy claims, the acquisition positions Backpack for growth in the European market.

Source: Bitrss.com

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