FTX managers deny information about the purchase of FTX EU by the Backpack exchange

What’s new? The new managers of the bankrupt crypto exchange FTX said that the purchase of its European unit FTX EU by crypto exchange Backpack was not approved by the bankruptcy court and Backpack was not authorized to make payments to FTX’s creditors. A day earlier, Backpack, founded by former FTX employees, announced that it had purchased FTX EU and that it would take over payments to EU customers as part of the court-approved bankruptcy proceedings.

Press release

What else is known? Backpack founder Armani Ferrante has said that his exchange will not be able to transact in the EU until it pays off FTX’s creditors, which is scheduled to happen as early as February.

However, FTX said in a January 8 statement that the FTX EU acquisition has not yet taken place or been approved by the Bankruptcy Court for the District of Delaware and that all statements released by Backpack were made without FTX’s knowledge.

FTX noted, however, that creditors had previously agreed to sell FTX EU to “certain former insiders,” but Backpack had not notified the trustees of the transaction and did not receive rights to administer the indemnities. At this point, FTX is solely responsible for repaying any funds it owes to former clients, the managers emphasized.

Backpack was founded in 2022 by Solana developer Armani Ferrante, who raised $20 million from FTX and market maker Jump Crypto. Backpack’s other co-founder, Tristan Yver, worked at FTX for about two years and left in May 2022.

During FTX’s collapse in November 2022, Backpack lost $14,5 million, or 88% of the company’s operating funds. It continued operations with minimal funding.

Backpack said in a statement that the purchase would help expand its presence in Europe due to FTX EU’s existing MiFID II license.

FTX’s reorganization plan went into effect on January 3, allowing it to begin making payments to creditors. Customers had to apply through the official website to be eligible for a refund, which should occur within 60 days for the first group, which includes users with claims of $50 000 or less.