In simpler terms, the troubled cryptocurrency exchange FTX clarifies that the takeover of its European branch, FTX EU, by another exchange named Backpack hasn’t received approval from the bankruptcy court yet. Additionally, Backpack has not been given authority to distribute funds to FTX’s creditors at this time.
On January 7th, Backpack declared they had taken over FTX EU. They stated that as part of the bankruptcy proceedings sanctioned by the court, they will handle the repayment of debts to European customers.
According to Armani Ferrante, the founder of Backpack, they won’t process any trades within the EU until they can repay FTX creditors. He anticipates this could happen as soon as February.
In a statement on January 8, FTX clarified that the alleged acquisition of FTX EU by Backpack has not taken place and hasn’t been sanctioned by the US Bankruptcy Court for the District of Delaware yet. Importantly, FTX noted that any statements made by Backpack were done so without their prior knowledge.
“[Backpack’s] Press Release was issued without the knowledge or involvement of FTX.”
FTX stated that debtors of FTX had previously consented to selling FTX EU to “certain ex-insiders” of FTX Europe as part of a settlement arrangement overseen by the bankruptcy court. However, they were notified that these former insiders have agreed instead to indirectly transfer FTX EU to Backpack.
It wasn’t until this past week that neither FTX nor the U.S. Bankruptcy Court learned about the secretive transaction where FTX was sold to Backpack.
FTX also noted that Backpack has not been given authority to manage creditor repayments.
According to FTX, they have not been granted the necessary approval to distribute funds to any FTX users or other creditors, even those who were previously customers of FTX.
“FTX is solely responsible for the return of any funds it owes to former FTX customers.”
According to their statement, the acquisition by Backpack will aid in increasing their presence in Europe, leveraging FTX’s license under the Markets in Financial Instruments Directive and Regulation (MiFID II).
In the year 2022, the company known as Backpack was established by a skilled developer on the Solana platform named Ferrante. It is said that he successfully raised a significant sum of $20 million in investment from both FTX and Jump Crypto, which he will use to create an exchange.
According to his LinkedIn profile, it appears that Tristan Yver, a co-founder of Another Backpack, was associated with FTX for approximately two years prior to his departure from the company in May 2022.
In the wake of FTX’s downfall in 2022, our organization, Backpack, suffered a significant setback, losing approximately $14.5 million, which equates to 88% of our operational resources. Since then, we’ve been navigating through challenging times, keeping our operations running with bare-bones funding.
Starting from January 3rd, the revised strategy for FTX has been implemented. As a result, creditors can now anticipate the commencement of their repayments.
For customers to qualify for reimbursement, they must have previously submitted a claim via the official site. According to FTX, this refund process is expected to be completed within 60 days for the initial batch of claims.
As a crypto investor, I understand that, following the FTX plan, those who fall under the category of “convenience classes” – which includes me since my claimed amount is $50,000 or less – will be prioritized for repayments first.
CryptoMoon reached out to both Backpack and FTX seeking their comments, however, neither had responded prior to our article’s release.
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2025-01-09 04:58