Backpack Exchange has introduced a groundbreaking initiative by launching a non-profit claims sale channel that allows FTX creditors to sell their bankruptcy claims to third-party buyers. This innovative platform offers an alternative to the official distribution process, which has already returned a staggering $6.2 billion across two major payment rounds.
The non-profit claims sale channel provides FTX creditors with a complete one-stop process that includes identity verification, claims validation, offer confirmation, and settlement payment, all without charging any fees. Backpack has made it clear that they will not profit from this service, emphasizing that the marketplace is simply a means of assistance to the crypto community following their own $14.5 million loss on FTX.
One of the key challenges faced by FTX creditors is the uncertainty surrounding claims in 49 restricted jurisdictions, with Chinese users constituting 82% of the disputed $800 million total value. The FTX Recovery Trust is currently seeking court approval to treat these claims as disputed until legal opinions determine the feasibility of distribution.
It is important to note that selling claims through the marketplace may involve opportunity costs, as creditors who opt to hold onto their claims may potentially receive higher compensation in future distributions. This decision comes on the heels of Backpack’s acquisition of FTX EU and their plans to oversee fund distribution to European customers under the Backpack EU brand, slated to launch in Q1 2025.
As FTX continues its recovery progress, the platform has distributed $6.2 billion across two major payment rounds since initiating repayments in February 2025. The first distribution focused on convenience class creditors with claims under $50,000, totaling $1.2 billion, while the second distribution, amounting to $5 billion, was allocated to larger claimants in May.
Despite these significant distributions, the FTX Recovery Trust is facing challenges in distributing funds to creditors in restricted jurisdictions, including China, Russia, Iran, North Korea, and 45 other nations. Chinese creditors, in particular, are mobilizing legal challenges against the restrictions, arguing that mainland China recognizes the commodity attributes of cryptocurrency and allows residents to hold digital assets.
Backpack’s strategic acquisition of FTX EU further solidifies their position as a key player in the FTX recovery ecosystem. The company’s emphasis on customer restitution and industry trust underscores their commitment to returning funds quickly and safely to affected parties. It is worth noting that Sam Bankman-Fried, the former FTX executive, remains imprisoned until December 2044 after being convicted on fraud charges.
In conclusion, Backpack’s launch of the FTX Debt Marketplace for creditors to sell claims to third-party buyers represents a pivotal development in the ongoing recovery efforts within the crypto community. The platform’s innovative approach to addressing creditor needs and uncertainties underscores their dedication to supporting those affected by the FTX bankruptcy.