FTX Denies Approval Of FTX EU Acquisition By Backpack Amid Bankruptcy Proceedings

Bankrupt cryptocurrency exchange FTX denied claims that crypto exchange Backpack has acquired its European subsidiary, FTX EU.

FTX said that the deal has not been approved by the US Bankruptcy Court in Delaware.

Backpack announced on 7 January 2025 that it had acquired FTX EU as part of the court-approved bankruptcy process. Backpack claimed that it would oversee creditor repayments to FTX EU customers.

At the time, Backpack founder Armani Ferrante said the exchange would not commence trading operations in Europe until it had ensured repayments to creditors, aiming to begin payouts as early as February.

EXPLORE: 10 Coins with High Returns: Crypto Forecast 2025

FTX Calls the Acquisition “Purported”

However, in a 8 January 2025 press release, FTX dismissed these assertions, calling the acquisition “purported.” FTX asserted that it had not been sanctioned by the bankruptcy court.

Furthermore, FTX clarified that Backpack has not been authorized to distribute funds to creditors of the defunct exchange. It also said that Backpack’s press release was issued without the exchange’s knowledge or involvement.

FTX revealed that it had previously agreed to sell FTX EU to “certain former insiders” of FTX Europe as part of a settlement overseen by the bankruptcy court.

The exchange added that it recently learned these insiders had transferred FTX EU to Backpack without prior notification to FTX or the court.

“Neither FTX nor the US Bankruptcy Court was made aware of the indirect sale of FTX EU to Backpack prior to this week,” the company said.

FTX also clarified that it retains exclusive authority over customer repayments. “Backpack has not been authorized by FTX to make any distributions to any FTX customers or other creditors,” FTX said. 

Backpack has positioned the acquisition as a means to expand its presence in Europe using FTX EU’s Markets in Financial Instruments Directive and Regulation (MiFID II) license.

Backpack has acquired FTX EU and its MiFID II License.

Our first priority is to return all customer EURO funds on behalf of the FTX estate, followed by rolling out a full suite of spot, margin, and futures trading products.

Crypto perps trading is coming back to Europe 🇪🇺 pic.twitter.com/ExxYFufZHj

— Backpack 🎒 (@Backpack) January 7, 2025

The company, founded in 2022 by Solana developer Ferrante, previously received $20 million in funding from FTX and Jump Crypto. Despite losing $14.5 million during FTX’s 2022 collapse, Backpack has continued operations with limited funding.

The reorganization plan for FTX, which took effect on 3 January, allows creditors to start receiving repayments. Initial reimbursements are set to go to “convenience classes,” including claims of $50,000 or less, within 60 days.

EXPLORE: 3 Experts Predict: How High Can Bitcoin Go In 2025?

FTX Settles Lawsuit With Bybit

Last year, the FTX bankruptcy estate reached a $228 million settlement with the cryptocurrency exchange Bybit to recover funds for repaying former FTX customers and creditors.

Under the terms of the settlement, FTX will retrieve $175 million in digital assets held by Bybit, and an additional $53 million in BIT tokens, which will be sold to Mirana Corp, Bybit’s investment arm.

FTX originally launched a $1 billion lawsuit against Bybit and Mirana in late 2023. It alleged that these entities used special privileges and “VIP” access to pre-emptively withdraw $327 million in digital assets and cash in the days leading up to FTX’s downfall.

The FTX bankruptcy estate set a goal to begin customer repayments by early 2025.

EXPLORE: Former FTX Digital Markets Co-CEO Ryan Salame Sentenced To 7.5 Years In Prison

Disclaimer

Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
99Bitcoins may receive advertising commissions for visits to a suggested operator through our affiliate links, at no added cost to you. All our recommendations follow a thorough review process.

Read more