FTX news in recent times has mostly been about the company’s fall, the collapsed firm’s CEO’s prison life, and other news about the company’s past misfortunes. While the company’s past shadow still haunts it years after its fall, FTX is currently in the news for something else. 

The Bankrupt crypto exchange FTX has revealed that Backpack’s acquisition of its European wing is incomplete. According to FTX, the bankruptcy court has yet to approve Backpack’s acquisition of its European arm. The company also revealed that Backpack has yet to be authorized to make distributions to FTX creditors. 

Read also: FTX’s Big Bang 2.0: How do Investors Get Benefited?

Backpack already acquired FTX in early January. It announced the acquisition on January 7, stating that as part of the court-approved bankruptcy process, it would be responsible for creditor repayments to its customers from the European Union.

At the time of the announcement, Armani Ferrante, founder of Backpack, said that Backpack would not “serve a single trade in the EU” until his company could pay back FTX’s creditors. He estimated the process would not exceed February. 

However, FTX revealed through a public statement on January 8 that despite Backpack’s announcement, the US Bankruptcy Court for the District of Delaware had not yet approved the acquisition, meaning that Backpack’s “purported” acquisition of FTX EU had not occurred. 

In addition, the now-defunct crypto exchange claimed that all of the statements released by Backpack were, in fact, without FTX's knowledge. FTX also claimed that its debtors had earlier agreed only to sell FTX EU to “certain former insiders” of FTX Europe. However, the company later confirmed that it had only later been informed that these former insiders had now agreed to an indirect transfer of FTX EU to Backpack. 

FTX also revealed that Backpack had not yet been authorized to manage any creditor repayments.

“Backpack has not been authorized by FTX to make any distributions to any FTX customers or other creditors, including any former FTX customers,” the FTX statement read, adding that “FTX is solely responsible for the return of any funds it owes to former FTX customers.”

Many have found it interesting that Backpack was founded by a Solana developer who reportedly got $20 million in funding from the same FTX and Jump Crypto to build the exchange. Tristan Yver, another co-founder at Backpack, has also been identified via his LinkedIn profile as having spent at least two years working at FTX before eventually leaving the company in May 2022. 

Backpack has also been revealed to have taken a massive hit during FTX’s collapse in 2022. The firm reportedly saw $14.5 million—about 88% of its entire operating funds—get completely wiped out. This left it with only a fraction of its funds to restart operations. Remarkably, a few years later, the firm managed to come back and buy part of FTX. Talk about a comeback story.

FTX and Alameda Research Transfer $10.8M to Binance, Coinbase, and Wintermute | HODL FM
Discover the latest crypto cash-out as FTX and Alameda Research move $10.8M across Binance, Coinbase, and Wintermute.
hodl-post-imageHODL FM: The Wildest Ride in the Crypto MarketHODL Team
hodl-post-image

Disclaimer: All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice. Please note that despite the nature of much of the material created and hosted on this website, HODL FM is not a financial reference resource and the opinions of authors and other contributors are their own and should not be taken as financial advice. If you require advice of this sort, HODL FM strongly recommends contacting a qualified industry professional.