One year after crypto exchange FTX collapsed, a group of ex-executives at the firm has teamed up to launch a new but similar platform, aiming to fix the issues that led to the company’s implosion.
According to a report from the Wall Street Journal, former FTX general counsel Can Sun and ex-employees Armani Ferrante and Claire Zhang have unveiled the Backpack Exchange. Zhang is Ferrante’s wife and Sun’s ex-deputy.
Ex-FTX Execs Launch New Exchange
Sun founded Trek Labs, a Dubai-based startup that received an operational license from the Virtual Assets Regulatory Authority of the United Arab Emirates last month. Ferrante serves as the CEO of Trek’s holding company in the British Virgin Islands and also runs Backpack, a platform that designs and operates crypto wallets, while Zhang is on the executive team.
Backpack Exchange is the name under which Trek will do business, and the exchange is looking to sell a 10% stake to investors at a $100 million valuation.
The Trek Labs founder and Ferrante also hired other former FTX legal and compliance employees because of their skills and experience. Zhang revealed that she is working without pay to help bolster the exchange and intends to transition out when Trek raises an investment round.
Sun, who testified during the criminal trial of the convicted founder and former CEO of FTX, Sam Bankman-Fried (SBF), said they would use the lessons learned from FTX implosion to keep user funds safe, running Backpack Exchange with Backpack’s technology. Users will be allowed to hold their assets in self-custody crypto wallets, which the exchange would not have access to.
Backpack’s Upcoming Beta Launch
Backpack’s wallets are designed with multiparty computation techniques that require several parties to approve transactions. The exchange plans to launch its beta version later this month, and according to Sun and Ferrante, customers can verify their holdings at any time.
Although it remains unclear how the crypto community would receive Backpack due to its founders’ links to FTX, Sun said he was unaware that SBF mishandled customers’ funds. The former FTX legal counsel disclosed that he resigned when SBF asked him to come up with legal justifications for why the exchange’s funds were at Alameda Research after a meltdown had revealed a $9 billion hole and the former CEO was trying to raise emergency cash from investors.
Sun later cooperated with prosecutors and helped with the investigation that led to SBF’s prosecution.