The Controversy Surrounding FTX Exchange and Backpack Acquisition
Recently, the FTX exchange found itself in a legal battle over the sale of its European subsidiary, FTX EU, to Backpack, a crypto platform founded by former FTX employees. This dispute has raised questions about the legitimacy of the acquisition and the responsibilities of the parties involved.
FTX released a statement on Jan. 8, clarifying that FTX Europe AG is the sole owner of FTX EU and that the transfer of shares to former FTX Europe insiders, as previously announced, did not take place as initially disclosed. The United States Bankruptcy Court for the District of Delaware did not approve Backpack’s acquisition of FTX EU, despite earlier agreements allowing the sale under the court’s supervision.
The bankrupt exchange alleges that former insiders of FTX Europe orchestrated an indirect transfer of FTX EU to Backpack without the company’s or the court’s knowledge. FTX has distanced itself from Backpack’s involvement in the ongoing asset recovery process for its global creditors, stating that Backpack is not responsible for returning funds to customers or creditors under the court’s jurisdiction.
FTX emphasized that it would handle customer claims related to FTX EU independently after the subsidiary’s sale is finalized. The company made it clear that it bears no responsibility for settling claims or managing customer funds held by FTX EU. Additionally, FTX disclaimed any association with Backpack’s communications regarding asset recovery, stating that it has not reviewed or approved any information disseminated by the crypto platform.
Backpack’s Response
In response to FTX’s claims, Backpack’s CEO, Armani Ferrante, defended the legitimacy of the acquisition, stating that it was approved by the Cyprus Securities and Exchange Commission after a thorough review process. Ferrante clarified that the transaction involved FTX EU’s founders and was not related to the bankruptcy estate.
Ferrante reiterated that Backpack is now solely responsible for managing FTX EU’s obligations to its former customers and emphasized that his exchange is not involved in FTX’s bankruptcy proceedings. He confirmed that Backpack will not handle fund distributions for international FTX customers.
The controversy surrounding the sale of FTX EU to Backpack highlights the complexities of cryptocurrency exchanges’ ownership and responsibilities in the event of bankruptcy. As the legal battle continues, the crypto community awaits further developments to see how this dispute will be resolved.