Backpack seeks to clarify EU entity acquisition deal following FTX estate's dispute over certain claims

Following Backpack’s announcement on Tuesday that it had acquired FTX EU following regulatory approval and would take responsibility for distributing the previously court-approved FTX bankruptcy claims, the FTX estate has disputed some of the claims made by the exchange founded by former FTX and Alameda employees.

The bankruptcy estate said in a Wednesday statement that Backpack’s announcement was made without its knowledge or involvement. It also claimed Backpack made several potentially confusing statements regarding FTX EU, FTX and the U.S. bankruptcy process.

According to the FTX estate, the U.S. Bankruptcy Court for the District of Delaware did not approve Backpack’s acquisition of FTX EU, which remains fully owned by FTX Europe AG, and a previously planned transfer of shares to former FTX Europe insiders has not yet occurred. While these insiders have agreed to indirectly transfer FTX EU to Backpack, neither the FTX estate nor the U.S. Bankruptcy Court was informed of this sale in advance, it added.

Furthermore, the estate said that Backpack has not been authorized to distribute funds to any FTX customers or creditors, and FTX EU alone is responsible for returning funds owed to its former customers following the completion of a sale of FTX EU. The FTX estate emphasized it has no involvement in the asset recovery website or communications issued by Backpack and disclaimed responsibility for any information or actions related to Backpack's activities.

Backpack seeks to clarify the situation

Backpack sought to clarify the situation on Thursday in response to the FTX estate’s claims. Backpack acknowledged the complexity of the sale of FTX's European assets and said it appreciated the FTX bankruptcy estate's efforts to provide clarity and prioritize maximizing customer returns.

However, it also suggested that certain statements made by the estate could be potentially confusing to FTX EU customers.

Backpack said in February 2024, the FTX estate sold its European assets, including FTX EU, to former insiders, with the transaction approved by the bankruptcy court and finalized in May 2024. Backpack later purchased these same assets from the insiders in June 2024, as reflected in German court records. The transfer of FTX EU to Backpack required regulatory approval from the Cyprus Securities and Exchange Commission, granted in December 2024.

“Following such approval, the FTX estate is obligated to transfer the shares as set out in the court-approved sales and purchase agreement,” Backpack said. “We look forward to the completion of the transfer so that, like the FTX bankruptcy estate, we can begin to return customer funds to former FTX EU customers.”

Once the share transfer is complete, FTX EU will be renamed Backpack EU, and Backpack EU will assume sole responsibility for returning funds to former FTX EU customers, the exchange added.

Backpack is a crypto exchange and digital wallet platform founded by former FTX and Alameda Research employees Can Sun and Armani Ferrante. It was valued at $120 million during its Series A financing round in early 2024. The new Backpack EU arm is slated to go live this quarter and will offer crypto derivatives.

FTX filed for bankruptcy in November 2022, and its ex-CEO, Sam Bankman-Fried, was found guilty of seven criminal counts — including two counts each of wire fraud and conspiracy to commit wire fraud — in November 2023. He was sentenced to 25 years in prison.