In response to challenges posed by the FTX Recovery Trust regarding the lawfulness of Backpack Exchange’s acquisition of FTX EU, Backpack Exchange has come forward with a statement.
On January 8th, it was announced that Backpack had completed the acquisition of FTX EU, following approval from the Cyprus Securities and Exchange Commission (CySEC) in December 2024.
In 2021, Digital Assets AG (DAAG), later known as FTX EU, was purchased by FTX for a sum of $323 million. After FTX’s bankruptcy filing in November 2022, FTX EU found itself caught up in the parent company’s insolvency proceedings.
In February 2024, the European branch of FTX, FTX EU, was repurchased by its co-founders Patrick Gruhn and Robin Matzke for $32.7 million. This acquisition was part of a court-agreed settlement aimed at boosting returns to creditors. The deal was finalized in May 2024.
Backpack said it “purchased the same European assets” from co-founders in June 2024.
After receiving the necessary approval, the FTX estate will be required to hand over the specified shares, as outlined in the court-sanctioned sale and purchase agreement, according to Backpack’s statement.
The European branch of the company will provide a variety of cryptocurrency derivative products throughout the European Union, which includes perpetual future contracts.
FTX estate disputes Backpack’s claims
The US-based FTX estate issued a statement on Jan. 8 disputing Backpack’s claims.
As reported by the estate, the stocks of FTX EU continue to be owned by FTX Europe AG, a subordinate company of FTX. The estate has made it clear that the transfer of shares to FTX EU’s co-founders, Patrick Gruhn and Robin Matzke, which was earlier announced, has not taken place yet.
Currently, all shares of FTX EU are owned entirely by FTX Europe AG, a company that is part of the larger FTX group.
According to the announcement, FTX had no prior knowledge or part in creating the press release for the Backpack.
Who pays creditors?
One contentious issue between FTX’s estate and Backpack Exchange revolves around who should handle creditor repayment management.
Backpack has announced that they will manage the dispersal of funds to the previous customers of FTX EU, while also renaming the organization as Backpack EU.
In a recent statement made by Armani Ferrante, the CEO of Backpack, he clarified that the FTX estate is not accountable for any EURO funds owed by FTX EU to its previous customers. He further explained that this entire process will be managed solely by Backpack EU.
On the contrary, the FTX estate asserts that Backpack lacks authorization for handling creditor repayments.
Creditors worry
Uncertainty over the repayment process is causing concern among creditors.
Sunil Kavuri, an advocate for FTX creditors, expressed to CryptoMoon that the secretive sale of FTX Europe to Backpack has led to perplexity among FTX Europe clients regarding the return of their assets.
Kavuri stated that the private purchase of FTX EU by Backpack is causing additional uncertainty and worry among FTX EU users regarding the return of their funds.”
This version aims to maintain the original meaning while using simpler, more conversational language that’s easy for readers to understand.
In addition, he pointed out that both Kraken and Bitgo were given permission to disburse funds to FTX clients, increasing the confusion. “Some FTX EU customers registered with these intermediaries,” Kavuri continued, “and they are now unsure about who will return their money to them – Backpack, Kraken, or Bitgo.
In my efforts to get additional insights, I attempted to contact both CryptoMoon and FTX/Backpack, yet no replies were forthcoming before the article went live.
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2025-01-09 16:35