FTX EU Acquired by Backpack Exchange, Eyes Regulated Crypto Derivatives Leadership in Europe

QuickTake

• Backpack Acquires FTX EU: Backpack Exchange acquires FTX EU, formerly licensed under Cyprus’ CySEC, for $32.7 million.
• Exclusive Perpetual Futures Offering: Backpack positions itself as the only regulated perpetual futures provider in Europe, aiming to launch operations in Q1 2025.
• MiCA Compliance: The firm has submitted its Markets in Crypto Assets (MiCA) notification, a key step for offering crypto derivatives under the EU’s regulatory framework.

  Backpack Exchange, a crypto trading firm led by former employees of Alameda Research and FTX, has acquired FTX EU, the European arm of the now-bankrupt crypto trading giant founded by Sam Bankman-Fried. The acquisition was finalized for $32.7 million, allowing Backpack to leverage FTX EU’s existing MiFID II license granted by the Cyprus Securities and Exchange Commission (CySEC).

  This strategic acquisition positions Backpack as a leading player in Europe’s evolving crypto derivatives market, particularly as the only regulated provider of perpetual futures contracts across the region.

  A New Chapter for FTX EU

  FTX EU was once part of the sprawling FTX empire, which collapsed in November 2022. The European branch operated under MiFID II regulations, offering a structured and compliant gateway for crypto trading in the European Union.

  Backpack’s acquisition marks a significant turning point, as CEO Armani Ferrante stated, “Once we return FTX EU customers’ funds, we’re excited to begin serving a regulated perpetual futures product as a priority.” This move ensures that former FTX EU customers will have their funds returned while transitioning to a revamped trading platform under Backpack.

  Regulatory Compliance and MiCA Notification

  Backpack is not only reviving FTX EU but also setting the stage for compliance with Europe’s new regulatory framework, the Markets in Crypto Assets (MiCA) regulation. Ferrante confirmed that the firm has already submitted its MiCA notification and expects to go live in the first quarter of 2025.

  Under MiCA, crypto firms operating in Europe must meet stringent requirements to ensure consumer protection, financial stability, and market integrity. Backpack’s adherence to these guidelines positions it as a trailblazer in the European crypto derivatives market.

  “Even though a few firms have been able to acquire approval for a limited form of a derivatives license, we’re not aware of any players that currently offer perpetuals and are live in the EU, including Coinbase and Bitstamp,” Ferrante explained.

  Expanding the Crypto Derivatives Ecosystem

  Backpack’s European arm plans to roll out a comprehensive suite of crypto derivatives, starting with perpetual futures. Perpetual futures contracts, a popular product in the crypto space, allow traders to speculate on price movements without an expiration date.

  While some competitors, such as Bitstamp, Coinbase, and D2X, have obtained MiFID II licenses, none currently offer perpetual futures within the EU. This gives Backpack a unique first-mover advantage in capturing a market dominated by offshore platforms like Deribit.

  Ferrante highlighted the firm’s commitment to innovation and expansion, stating, “A full suite of products is being worked on, although some of these may not roll out in Q1.”

  Backpack’s Foundations and Vision

  Backpack Exchange is no stranger to the crypto industry. The company’s founders have been active contributors to the Solana ecosystem, having established a successful wallet and NFT business. Their experience in building user-friendly and scalable blockchain solutions is expected to play a crucial role in the development of Backpack’s derivatives platform.

  In 2024, the company raised $17 million in funding, demonstrating strong investor confidence in its vision and ability to execute. This capital will likely fuel further innovation and expansion as Backpack integrates FTX EU’s infrastructure into its operations.

  FTX EU Customer Refunds and Relaunch

  One of Backpack’s immediate priorities is to refund former FTX EU customers who were affected by the parent company’s collapse. By addressing this critical issue, the firm aims to rebuild trust and establish itself as a reliable and transparent operator in the crypto space.

  Ferrante emphasized the importance of customer satisfaction, noting that the company is committed to making the transition as seamless as possible for former FTX EU users.

  The Road Ahead

  The acquisition of FTX EU and Backpack’s ambitious plans signal a pivotal moment for Europe’s crypto derivatives market. As regulatory frameworks like MiCA take shape, the region is poised to become a hub for compliant and innovative financial products.

  Backpack’s move to establish itself as the first regulated perpetual futures provider in the EU could set a new standard for the industry, attracting both retail and institutional traders seeking secure and transparent trading environments.

  With a solid foundation, a clear regulatory path, and a focus on customer trust, Backpack is well-positioned to reshape the European crypto trading landscape and capitalize on the growing demand for regulated derivatives.