by Cryptocurrency exchange Backpack has addressed the ongoing controversy surrounding its purchase of FTX EU, the European subsidiary of the collapsed FTX Trading LTD. The dispute revolves around ownership transfer, regulatory approval, and accountability for reimbursing former FTX EU customers.
In an official statement, Backpack confirmed that the acquisition was completed and authorized by regulators, despite claims from the FTX bankruptcy estate that the ownership transfer had not yet occurred. The company also emphasized its commitment to returning customer funds, taking full responsibility for reimbursements once the transaction is finalized.
The FTX EU Acquisition Explained
The confusion stems from conflicting reports about the transfer of FTX EU shares. According to Backpack:
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In March 2024, the FTX bankruptcy court approved the sale of FTX EU to insiders Robin Matzke and Patrick Gruhn.
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The sale was reportedly finalized in May 2024, and Backpack purchased FTX EU from Matzke and Gruhn in June 2024.
However, the FTX estate has claimed that FTX EU still holds 100% of its share capital, suggesting that the transfer to Matzke and Gruhn has not yet taken place.
Backpack highlighted that the Cyprus Securities and Exchange Commission (CySec) approved the transaction in December 2024 following a thorough due diligence process. The exchange asserts that this regulatory approval obligates the FTX estate to transfer ownership in accordance with the court-approved sale and purchase agreement.
Despite attempts to notify the FTX estate, Backpack has reportedly received no response, leaving the matter unresolved.
Backpack’s Commitment to Former FTX EU Customers
Backpack reassured former FTX EU clients that it will handle all reimbursements directly, relieving the FTX estate of any financial responsibility. Once fully operational, FTX EU will be rebranded as Backpack EU, with a planned European launch in Q1 2025.
The platform will provide:
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A full suite of cryptocurrency derivatives, including Bitcoin perpetual futures.
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A regulated and secure trading environment focused on European customers.
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Measures to protect client funds and maintain transparency, avoiding the operational pitfalls that contributed to FTX’s collapse.
By framing the acquisition as an opportunity to offer a compliant, customer-oriented platform, Backpack seeks to distance itself from FTX’s troubled history.
Regulatory Oversight and Compliance
Regulatory approval from CySec is a critical milestone for Backpack, demonstrating adherence to European compliance standards. The exchange has committed to:
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Implementing robust KYC and AML protocols.
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Maintaining transparent operational procedures.
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Ensuring that all trading activities comply with local laws.
These measures are intended to rebuild confidence among investors and customers, signaling a fresh start for the European platform.
FTX Fallout and Legal Context
FTX’s collapse continues to affect the cryptocurrency industry. In November 2024, the U.S. Department of Justice (DOJ) filed a civil forfeiture case to seize $16 million in crypto from a Binance account connected to alleged bribes orchestrated by former CEO Sam Bankman-Fried.
The funds reportedly originated from a $40 million bribe in 2021, used to unfreeze $1 billion in assets on Chinese exchanges, including Solana (SOL), Avalanche (AVAX), and other tokens. Suspicious trading activity and rapid Bitcoin conversions led authorities to flag the account.
Bankman-Fried, now serving a 25-year prison sentence while appealing his conviction, remains central to ongoing investigations. In this context, Backpack’s acquisition of FTX EU could help stabilize affected users’ finances and restore trust in the European crypto market.
Why This Acquisition Matters
Backpack’s purchase of FTX EU is significant for several reasons:
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Regulatory Compliance: Demonstrates the importance of adhering to approval processes in cross-border crypto acquisitions.
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Customer Protection: Ensures former FTX EU users are reimbursed efficiently.
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Transparency: Reinforces trust in the exchange by clarifying ownership and operational responsibility.
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European Market Expansion: Positions Backpack EU as a regulated platform offering advanced crypto products for European traders.
Industry experts note that the outcome of this acquisition could set a precedent for post-bankruptcy crypto deals, emphasizing regulatory compliance and responsible customer fund management.
Looking Ahead: Backpack EU in 2025
As Backpack prepares for its Q1 2025 European launch, the exchange aims to:
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Deliver secure, regulated crypto trading services in Europe.
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Handle reimbursements independently of the FTX estate.
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Offer cryptocurrency derivatives tailored to European markets.
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Maintain high standards of compliance following CySec approval.
By separating itself from FTX’s troubled legacy, Backpack hopes to restore confidence in the European cryptocurrency market, providing users with a secure and transparent trading platform.
Conclusion
The acquisition of FTX EU by Backpack has generated controversy due to conflicting claims over ownership and accountability. However, Backpack’s public statements clarify that:
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The acquisition was approved by CySec.
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The exchange is responsible for reimbursing former FTX EU clients.
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Backpack EU will launch as a regulated European platform offering advanced crypto derivatives.
Backpack’s proactive approach could stabilize the European crypto market, set standards for post-bankruptcy transactions, and demonstrate how regulatory compliance and customer protection can coexist in the digital asset space.
As the cryptocurrency industry continues to evolve, Backpack EU’s 2025 launch may serve as a model for responsible, compliant operations, ensuring a safer trading environment for European users.
