FTX and Backpack dispute sale of European arm to former insiders’ crypto platform

The bankrupt FTX exchange has challenged the announced sale of its European subsidiary, FTX EU, to Backpack , a crypto platform founded by former FTX employees.

In a Jan. 8 statement , FTX clarified that its subsidiary FTX Europe AG wholly owns FTX EU. The company stated that the anticipated transfer of FTX EU shares to former insiders of FTX Europe has not occurred as previously disclosed.

FTX also clarified that the United States Bankruptcy Court for the District of Delaware did not approve Backpack’s acquisition of FTX EU .

Earlier agreements under the court’s supervision allowed the FTX Debtors to sell FTX EU to former FTX Europe insiders as part of a settlement.

However, the bankrupt exchange claimed that these insiders arranged an indirect transfer of FTX EU to Backpack without the company’s or the court’s prior knowledge.

FTX EU asset recovery

FTX further distanced itself from any connection between Backpack and the ongoing asset recovery process for its global creditors.

According to FTX, Backpack would not return funds to customers or creditors under the US Bankruptcy Court’s jurisdiction. Instead, FTX EU is independently responsible for addressing any liabilities owed to its former customers.

The statement highlighted that the firm would handle customer claims related to FTX EU exclusively after the subsidiary’s sale was finalized. The bankrupt exchange stressed that it bears no responsibility for settling such claims or managing customer funds held by FTX EU.

Furthermore, FTX disclaimed any association with Backpack’s recent communications, including its website and press releases about asset recovery. The company stressed that it has not reviewed or approved any information disseminated by Backpack.

Backpack’s stance

In response, Backpack maintained that the acquisition of FTX EU was legitimate and completed in compliance with regulatory guidelines.

Backpack’s CEO Armani Ferrante stated that the transaction involved FTX EU’s founders and was cleared by the Cyprus Securities and Exchange Commission after a year-long review process. Ferrante emphasized that the acquisition did not involve the bankruptcy estate.

According to him:

“FTX EU was sold to its original founders and approved by the bankruptcy court, free and clear.  Backpack bought the company not from the estate, but from the FTX EU founders.”

Ferrante reiterated that FTX EU’s obligations to its former customers are now solely managed by Backpack.

He also confirmed that his exchange is not involved in FTX’s ongoing bankruptcy proceedings and will not handle fund distributions for international FTX customers.

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