A group of former employees from FTX and Alameda Research has successfully raised $17 million to launch a cryptocurrency exchange called Backpack, according to a Bloomberg report.
Based in Dubai, Backpack extends beyond a traditional exchange to offer a crypto wallet and an NFT collection named Mad Lads, achieving a valuation of $120 million in its Series A funding round. The company’s leadership includes Armani Ferrante, who serves as the CEO and co-founder and was an early employee at Alameda Research and Can Sun, formerly the general counsel for FTX. Additionally, five out of the 40-person team at Backpack are ex-FTX employees.
Backpack’s strategic growth and market entry
Launched in October 2023, Backpack has been granted a virtual-asset service provider license in Dubai. The funding round that fueled its early growth was led by Placeholder VC and saw participation from various notable crypto venture firms, including Wintermute, Robot Ventures, Selini Capital, and Amber Group. As part of its expansion strategy, Backpack is set to enter the U.S. market in selected states.
The initiative to start Backpack comes in the aftermath of FTX’s collapse, a scenario that has significantly raised the bar for creating and operating a crypto exchange. The founders have noted the challenges they faced due to their association with FTX, including initial skepticism from potential business partners. However, the situation has improved over time, with the company boasting more than 420,000 verified users worldwide. Backpack has shown particular popularity among Chinese-speaking users, underscoring the demand for new crypto trading platforms in Asia.
In February, Backpack reported a one-side trading volume of $6.53 billion, highlighting its rapid growth and the market’s receptiveness to new entrants. The company’s foray into the competitive crypto exchange market is timely, considering the opportunities presented by the disarray following FTX’s downfall. Other startups, such as EDX Markets backed by Citadel Securities and Fidelity Digital Assets, and Rulematch in Europe, are also entering the space, indicating a growing interest in establishing new trading venues post-FTX.
The formation of Backpack by former FTX and Alameda Research employees, including Ferrante’s significant contributions to the Solana blockchain and Sun’s testimony during Bankman-Fried’s trial, adds a layer of experience and insight into the new venture.
The team’s background and the challenges faced due to their previous association with FTX underline the complexities of launching an exchange in the crypto market.
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