A group of former employees of FTX and Alameda Research, two of the most prominent crypto firms that collapsed last year, have raised $17 million to launch Backpack, a new crypto exchange based in Dubai.
The funding round, led by Placeholder VC, values Backpack at $120 million, according to a press release.
Backpack is not just a crypto exchange; it also offers a wallet and a collection of NFTs called Mad Lads.
The platform aims to fill the gap left by the downfall of FTX and Alameda, which were once the leading players in the crypto space but were shut down by the US authorities for fraud and money laundering charges.
The founder and CEO of FTX, Sam Bankman-Fried, is currently facing a 100-year prison sentence, while the founder and CEO of Alameda, Sam Trabucco, is on the run.
The team behind Backpack consists of 40 people, five of whom are former FTX and Alameda employees.
The co-founders are Armani Ferrante, who was an early employee at Alameda, and Can Sun, who was the general counsel at FTX. Sun was also a prosecution witness in the trial of Bankman-Fried, testifying against his former boss.
Backpack launched in October 2023, and has since acquired a virtual-asset service provider license in Dubai.
The platform has also gained traction among Chinese-speaking users, reaching over 420,000 verified users worldwide and $6.5 billion in one-sided trading volume in February.
Backpack plans to expand its operations to select states in the US, as well as other regions.
Ferrante said that creating an exchange today is very different than a few years ago, especially after the catastrophe that was FTX.
Sun also echoed the same statement by saying that Backpack is not trying to replicate or replace FTX and Alameda, but rather to create a new and better platform that can serve the needs and expectations of the crypto community.
He said that the bars are much higher now and that Backpack has to prove itself to the market and the regulators.
Backpack is one of the several new crypto exchanges that have emerged in the wake of FTX and Alameda’s demise, aiming to capture the market share and the trust of the crypto users.
Some of the other notable examples are EDX Markets, which is backed by Citadel Securities and Fidelity Digital Assets, and Rulematch, which targets financial institutions in Europe.
The crypto space is undergoing a rapid and dynamic transformation, as new players enter the scene, and old players exit or reinvent themselves.
Backpack is a testament to the resilience of the crypto industry, and a sign of hope for web3.
