In a significant move for the European cryptocurrency landscape, Backpack Exchange has acquired FTX EU, the bankrupt European arm of Sam Bankman-Fried’s crypto empire, for $32.7 million. This acquisition marks a pivotal moment as Backpack aims to offer regulated crypto derivatives across Europe, positioning itself to challenge dominant players in the space.
FTX EU Acquisition: A $32.7 Million Deal
Backpack Exchange, a crypto trading company founded by former Alameda Research and FTX employees, has purchased FTX EU, which was licensed by the Cyprus Securities and Exchange Commission (CySEC) under the MiFID II regulations. This strategic acquisition gives Backpack a foothold in Europe, enabling them to operate a fully regulated crypto derivatives exchange. The deal, valued at $32.7 million, includes FTX EU’s MiFID II license, which is crucial for the firm’s expansion plans within the EU’s evolving regulatory environment.
FTX EU’s sale follows the company’s collapse and bankruptcy, which left many customers stranded. However, with Backpack’s new ownership, the focus now shifts to customer restitution and the introduction of a regulated perpetual futures product to serve European markets.
Regulated Perpetual Futures: A Unique Offering in Europe
One of the standout features of Backpack’s new European operations is its ability to offer perpetual futures contracts, a derivative product that has gained massive popularity in the crypto space. According to Backpack’s CEO, Armani Ferrante, the company is set to be the only regulated provider of such products across Europe, thanks to its MiFID II license. This positions Backpack as a pioneer in the region, catering to crypto traders who have been looking for regulated platforms that offer high-leverage products like perpetual futures.
As Europe tightens its crypto regulations, firms that wish to offer derivatives must comply with new legal frameworks like the Markets in Crypto Assets (MiCA) regulation. With MiCA notifications already submitted, Backpack expects to go live with its offerings in Q1 2025, just as the MiCA rules take full effect across the EU.
A Strong Position in the European Crypto Derivatives Market
The competition in the European crypto derivatives market is heating up, with several other firms also vying for MiFID II licenses. Notably, exchanges like Bitstamp and Coinbase have already secured such licenses, while D2X, based in the Netherlands, has been granted approval and plans to launch USD-denominated futures and options in the coming months. However, Backpack’s focus on perpetual futures and its regulated status make it a unique player in the field.
Currently, major players like Deribit, based in Panama, dominate the crypto derivatives space. However, Backpack’s move into the European market could shift this dynamic, especially as regulatory pressure increases on offshore exchanges.
The Road Ahead for Backpack Exchange
Backpack’s acquisition of FTX EU marks just the beginning of its ambitious plans to expand across Europe. With a full suite of crypto derivatives products in the pipeline, Backpack is working to diversify its offerings beyond perpetual futures. Although these additional products may not launch immediately, the firm is determined to make its mark as a regulated exchange within Europe.
As part of its commitment to customer security, Backpack plans to return funds to FTX EU customers before focusing on the rollout of new services. The firm has already raised $17 million in funding, and with its team’s experience in the crypto space, it is well-positioned to challenge established exchanges and introduce a new wave of regulated products in the European market.
