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Former FTX employees launch new crypto exchange

TL;DR

  • Former FTX and Alameda employees launched Backpack, a Dubai-based crypto exchange, raising $17 million for a $120 million valuation.
  • Backpack, offering a crypto exchange, wallet, and NFT collection, secured a Dubai license and plans U.S. expansion.
  • Overcoming initial skepticism from their FTX past, Backpack has attracted over 420,000 users and shown significant trading volume.

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.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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