Backpack, a digital wallet company, has announced its foray into the cryptocurrency exchange market following the acquisition of a crucial license from the Dubai Virtual Assets Regulatory Authority (VARA). This development marks a significant step forward for the company as it ventures into the world of virtual asset trading.
VARA paves the way for regulatory compliance
Backpack, originally established by the crypto infrastructure firm Coral, revealed that its forthcoming exchange will operate under strict regulatory oversight, thanks to the issuance of a Virtual Asset Service Provider (VASP) license by VARA. This regulatory endorsement is a testament to Backpack’s commitment to providing a secure and transparent trading platform for its users.
In a statement, Backpack highlighted some of the innovative features that will set its exchange apart. These include a “next-generation exchange” incorporating cutting-edge technologies such as zero-knowledge proofs of reserves (zk-proofs), Multi-Party Computation (MPC) for custody, and low-latency order execution. These features aim to enhance security, transparency, and efficiency in the cryptocurrency trading experience.
VARA’s role in Dubai’s virtual asset landscape
VARA, the Dubai Virtual Assets Regulatory Authority, plays a pivotal role in overseeing all virtual asset activities within the Emirate of Dubai. Its approval and regulation of Backpack’s cryptocurrency exchange represent a significant milestone in the company’s journey towards becoming a trusted player in the crypto industry.
Backpack’s CEO and founder, Armani Ferrante, has demonstrated remarkable resilience and determination in navigating challenging circumstances over the past year. Ferrante, a former engineer at Alamada Research, successfully raised $20 million for Coral in a funding round co-led by FTX Ventures shortly before the collapse of the exchange.
Following the downfall of FTX, Ferrante faced the daunting task of recovering funds tied up in the exchange, including the $10 million invested by FTX Ventures in Coral. His decision to launch an independent cryptocurrency exchange reflects a commitment to improving industry standards and ensuring greater transparency and security.
A vision for transparency and security
Armani Ferrante expressed his vision for the future of cryptocurrency exchanges, saying, “It’s time to put an end to the days of opaque crypto exchanges representing everything our industry stands against. It shouldn’t be normal to use an exchange with a single point of failure, without proof of reserves, or without auditability.” This commitment to transparency and security underscores Backpack’s mission in crypto space.
Backpack has announced its plan to initiate a beta launch of the new exchange in November. This beta phase will allow selected users to test the platform’s functionalities and provide valuable feedback. The exchange is expected to go live for the general public in the first quarter of 2024, offering a broader range of features.
The company also revealed its intentions to expand its offerings by adding various trading functionalities, including derivatives, margin trading, and cross-collateralization. These additions will further diversify the services available to users and cater to a wider range of trading preferences.
Backpack boasts a compliance team with extensive professional experience gained from renowned financial institutions such as Barclays, State Street, HSBC, and Coinbase. This expertise positions the company to maintain the highest standards of regulatory compliance and user security.
