The collapse of FTX filled the crypto community with uncertainty and contributed to shaping the market in the following years. Since then, the crypto industry has seen better days, and newly launched projects have a healthier landscape to navigate.
However, FTX’s fall from grace may still haunt some projects, as trust is not easily recovered by those who once were related to the now-bankrupt company.
Can Sun, former FTX general counsel and key witness in SBF’s criminal trial, teamed up with Armani Ferrante, ex-software developer at Alameda Research, and other executives at the FTX company to create a new crypto exchange.
New Crypto Exchange On The Block
New crypto exchange Backpack, founded by former FTX and Alameda Research executives, announced in an X post this Wednesday that it’s starting operations in eleven US states and territories.
Backpack is a regulated centralized exchange (CEX) that operates in jurisdictions worldwide, with the promise to expand to several countries in the following years.
The Dubai-based exchange operates on the Virtual Asset Service Provider (VASP) license granted by the Dubai Virtual Assets Regulatory Authority (VARA). VARA, the world’s first independent regulator for virtual assets, provides a framework for Backpack to operate in all jurisdictions.
Accordingly, The VASP license authorizes Trek Labs to serve “institutional investors, qualified investors, and retail investors.”
As per the announcement, Backpack Exchange is currently in Beta and is available to California, Colorado, Indiana, Missouri, New Hampshire, Pennsylvania, Tennessee, Utah, Virginia, the Virgin Islands, Wisconsin, and Wyoming residents.
According to Backpack’s support website, only spot trading is live on the platform, while margin trading, derivatives, cross-collateral, and other advanced trading features will come soon.
Today, we beginning our journey to bring @Backpack Exchange into the USA.
It’ll be slow. It’ll be steady. It’ll be hard.
But it’ll be worth it. https://t.co/s3ayqMBpsY
— Armani Ferrante (@armaniferrante) February 21, 2024
Building Trust Brick By Brick
According to Ferrante, who serves as the Backpack’s CEO, the newly founded exchange has a rigorous standard based on transparency and investors’ trust:
Our standards are rigorous. Our bar is high, and we are committed to not only do things right by the current financial rules, but to forge new paths for centralized institutions leveraging cryptography for trust minimization.
As previously reported, Sun and Ferrante stated their intention to use the lessons learned from the FTX’s failure to “safeguard” users’ funds to “properly” protect customers’ holdings and “ensure transparency this time around.”
According to the website, the exchange is built on a private blockchain designed specifically to run a crypto exchange. Backpack’s technology will allow users to have their own “self-custody” crypto wallet that won’t be unliterally accessible by the exchange itself.
To further ensure security, “Each deposit, withdrawal, order placement, and cancel is agreed upon by independent nodes on the network.” Additionally, customers will be able to verify their holding at any time.
“In a post-FTX world, you need trust and transparency to create a true alternative to the other players,” Sun told the Wall Street Journal.
Lastly, Ferrante voiced his excitement for the journey ahead in an X post, saying, “It’ll be slow. It’ll be steady. It’ll be hard. But It’ll be worth it.” He expressed the team’s commitment to doing things right “brick by brick,” despite the years it might take to complete.
