The dispute over ownership of FTX EU, the European branch of the now-defunct FTX exchange, has heated up between Backpack Exchange and the FTX estate. Backpack Exchange, a cryptocurrency trading platform, claims to have completed the acquisition of FTX EU in 2024, with approval from the Cyprus Securities and Exchange Commission.
FTX acquired FTX EU, formerly known as Digital Assets AG (DAAG), for $323 million in 2021. Following FTX’s fall in November 2022, the subsidiary was involved in bankruptcy procedures. In February 2024, FTX EU was sold back to DAAG co-founders Patrick Gruhn and Robin Matzke for $32.7 million in a court-approved transaction designed to maximize creditor returns. They supposedly completed the transition to Backpack in June 2024.
Disputed claimsThe FTX estate disputes Backpack’s claims, asserting that FTX Europe AG, a company subsidiary, still owns the shares of FTX EU. The estate asserts that the previous transfer of shares to Gruhn and Matzke remains incomplete.
Backpack disputes this, citing governmental permissions and claiming that the transfer was valid and binding. The company intends to rebrand FTX EU as Backpack EU and manage consumer funds separately.
Creditors’ ConcernsIn the midst of the battle, it is unclear who will reimburse creditors. Backpack’s CEO, Armani Ferrante, announced that the rebranded firm, Backpack EU, will handle repayments. However, the FTX estate has denied giving Backpack permission to oversee these disbursements.
Creditors, already alarmed by the collapse of FTX, are concerned about contradicting information. There are still questions about whether Backpack, Kraken, or Bitgo—entities permitted to distribute funds in distinct methods—will handle reimbursements.
Regulatory Approval and Next StepsBackpack cites CySEC clearance as proof of the deal’s validity, underlining that it intends to deploy cryptocurrency derivative services throughout Europe. However, FTX asserts that they failed to inform the US Bankruptcy Court about the indirect transaction, further complicating the issue.
The ongoing challenges in the FTX bankruptcy case are evident as both parties brace for further legal battles.
