FTX Denies Court Approval of Backpack's European Arm Acquisition

In a significant development in the ongoing FTX bankruptcy proceedings, the crypto exchange has officially disputed Backpack's claims regarding the acquisition of FTX EU and its authority to handle creditor repayments.

Contested Acquisition Claims

FTX issued a formal statement on January 8 contradicting Backpack's recent announcement of acquiring FTX's European operations. According to FTX, the purported acquisition lacks crucial bankruptcy court approval from the US District Court of Delaware. More notably, FTX emphasized that Backpack's press release was issued without their knowledge or involvement.

Complex Transfer Situation

The situation reveals a more nuanced background than initially presented. While FTX debtors had previously agreed to sell FTX EU to certain former FTX Europe insiders as part of a settlement agreement, the recent indirect transfer to Backpack came as a surprise. FTX stated they were only recently informed about these former insiders agreeing to transfer FTX EU to Backpack indirectly.

Creditor Repayment Authority

FTX has firmly established that they maintain sole responsibility for creditor repayments, directly challenging Backpack's announcement about assuming responsibility for EU customer compensation. The bankruptcy estate emphasized that Backpack lacks authorization to distribute any funds to FTX customers or creditors.

Backpack's Background and Intentions

Backpack, founded in 2022 by Solana developer Armani Ferrante, had announced plans to leverage FTX's MiFID II License for European expansion. The exchange, which previously received $20 million in funding from FTX and Jump Crypto, has notable connections to FTX through co-founder Tristan Yver, a former FTX employee. Despite losing 88% of its operating funds ($14.5 million) during FTX's collapse, Backpack has continued operations.

Current FTX Reorganization Status

The FTX reorganization plan, effective since January 3, has begun its creditor repayment process. The initial phase focuses on "convenience classes" – claims of $50,000 or less – with distributions expected within 60 days for eligible creditors who filed claims through the official website.

This situation highlights the complex nature of cryptocurrency exchange bankruptcies and the importance of proper regulatory oversight in acquisition processes. The contradicting statements from both parties suggest that further legal clarification may be necessary before any transfer of FTX EU assets can proceed.