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Former FTX and Alameda Research employees have secured $17 million in funding to establish Backpack, a crypto exchange, stepping in to address the gap left by their former employer Sam Bankman-Fried's crypto empire.
Backpack's Genesis: $17 Million Seed Funding
Headquartered in Dubai, Backpack functions as a crypto exchange and offers a wallet and an NFT collection known as Mad Lads. With a valuation of $120 million following this Series A round, the company's CEO and co-founder, Armani Ferrante, previously worked at Alameda Research. In contrast, another co-founder, Can Sun, served as FTX's former general counsel. Out of Backpack's 40-person team, five were previously employed at FTX.
Since its launch in October 2023, the exchange has acquired a virtual-asset service provider license in Dubai. The Series A funding was led by Placeholder VC, a crypto venture firm, with contributions from Wintermute, Robot Ventures, Selini Capital, Amber Group, and others. Backpack is now expanding its operations into select states in the US.
Ferrante highlighted the changing landscape of creating exchanges, stating, "Creating an exchange today is very different than creating an exchange a year or two years ago. Especially after the catastrophe that was FTX, I think the bars are so much higher now."
Navigating Post-FTX Era
Following the collapse of FTX, Sun mentioned facing skepticism in business meetings due to their past association with FTX. However, he noted a decrease in such encounters since then.
Backpack has garnered over 420,000 verified users worldwide and has mainly gained traction among Chinese-speaking users. Based on a report by Coingape, Ferrante emphasized the significant market potential in Asia for crypto trading venues, revealing that the company reported $6.53 billion in one-side trading volume in February.
Crypto News states that Ferrante and Sun are moving forward despite their past ties to Alameda, while Bankman-Fried grapples with the aftermath of a court ruling against him. The former business magnate has appealed to a judge to reduce his sentence to a maximum of six-and-a-half years, citing his autism and expressing profound remorse for the $8 billion fraud.
Backpack's emergence aligns with a trend of recent launches capitalizing on opportunities arising from FTX's downfall. EDX Markets, supported by Citadel Securities and Fidelity Digital Assets, commenced operations last year and is now expanding into Singapore. Meanwhile, Rulematch entered the market in Europe in December, targeting financial institutions.
Sam Bankman-Fried Advocates for Solana from Jail
Meanwhile, Sam Bankman-Fried, the founder of the bankrupt crypto exchange FTX, has been expressing unexpected sentiments from behind bars. Held at the Metropolitan Detention Center in Brooklyn since last summer, awaiting sentencing after being convicted of charges related to the collapse of FTX, Bankman-Fried has reportedly been advocating for investments in Solana (SOL) while incarcerated.
Despite facing an uncertain future, Bankman-Fried has been actively discussing crypto market trends with detention center staff and sharing investment insights regarding Solana with guards, potentially inviting increased legal scrutiny.
Photo: Mariia Shalabaieva/Unsplash
