Backpack Exchange Acquires FTX EU for $32.7 Million

In a significant move, Backpack Exchange, a cryptocurrency trading company founded by former Alameda Research and FTX employees, has acquired FTX EU, the European arm of Sam Bankman-Fried’s now-bankrupt cryptocurrency trading empire. The acquisition, valued at $32.7 million, marks a strategic expansion for Backpack Exchange into the European market.

Expanding European Presence with MiFID II License

FTX EU, which held a MiFID II license under the Cyprus Securities and Exchange Commission (CySEC), will enable Backpack Exchange to offer a full suite of crypto derivatives throughout the EU. According to Armani Ferrante, CEO of Backpack Exchange, the company will capitalize on its position as the only regulated perpetual futures provider across Europe.

Competition in the European Crypto Derivatives Market

Several crypto trading firms have applied for a MiFID license, which allows firms to offer crypto-asset services under Europe’s new Markets in Crypto Assets (MiCA) regime. Notable recipients of the MiFID II license include Bitstamp and Coinbase, while D2X, based in the Netherlands, has also received a license and plans to deliver USD-denominated futures and options. Backpack Exchange aims to shift the crypto derivatives market dominance away from centralized exchanges like Deribit.

Plans for Regulated Perpetual Futures Product

Backpack Exchange has submitted its MiCA notification and expects to go live in the first quarter of 2025. Ferrante emphasized that the company is not aware of any players currently offering perpetuals and live in the EU, including Coinbase and Bitstamp. Once FTX EU customers’ funds are returned, Backpack Exchange will prioritize serving a regulated perpetual futures product.

Future Product Offerings

While a full suite of products is being developed, Ferrante noted that some may not roll out in Q1. Backpack Exchange, whose founders have contributed to the Solana ecosystem and established a successful wallet and NFT business, raised $17 million in funding last year.

Conclusion

The acquisition of FTX EU by Backpack Exchange marks a significant expansion into the European market, enabling the company to offer a full suite of crypto derivatives. With its MiFID II license and plans for a regulated perpetual futures product, Backpack Exchange is poised to compete with established players in the European crypto derivatives market.

Source: Coindesk.com

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