FTX issues clarification on Backpack acquisition and refund claims

Bankrupt cryptocurrency exchange FTX has responded to Backpack’s recent claims of acquiring its European arm, FTX EU, and refunding customer funds.

In a statement released on January 8, the bankrupt crypto firm clarified that the US Bankruptcy Court has not approved the sale of FTX EU to Backpack, nor has it been authorized to handle distributions of funds to creditors.

Misleading statement

On January 7, global crypto trading platform Backpack announced via social media that it had acquired FTX EU and would handle creditor payments for European customers as part of a court-approved bankruptcy process. Additionally, founder Armani Ferrante emphasized that the company was committed to working with all relevant parties to prioritize the return of customer funds to the blog.

With a presence in more than 150 countries, the exchange also stated that the acquisition had received approval from the Cyprus Securities and Exchange Commission (CySEC) with plans to expand through crypto derivatives services such as spot, margin and futures trading across the EU.

However, FTX denied these claims, stating that Backpack’s press release and related website contained multiple potentially misleading information. It clarified that its subsidiary, FTX Europe AG, still owns 100% of the share capital of FTX EU.

The company also said that while a prior agreement was made under court supervision to transfer FTX EU shares to former FTX Europe insiders, that transfer has not yet taken place. He alleged that the indirect transfer of the former to Backpack, arranged by these insiders, was done without their knowledge or court approval.

The backpack has no role in the redistribution of funds

In addition, the release notes that Backpack is not authorized to make distributions to any creditors or customers, including former European customers. The defunct exchange reiterated that FTX EU itself remains solely responsible for returning the funds to its clients.

“FTX will not be responsible for the repayment of any funds owed by FTX EU to its former customers and expressly disclaims any liability for such repayment by FTX EU,” the disclosure reads.

He also explained that the amounts owed by his subsidiary to its customers have not been determined by the corresponding entities either.

In a related update, the team confirmed the effectiveness of its Chapter 11 reorganization plan on January 3, 2025, with a record initial distribution date set for the same day. Pending regulatory compliance, distributions to convenience class claimants are expected within 60 days.

Elsewhere, on January 2, another troubled crypto firm, Celsius, filed an appeal challenging an earlier decision that had dismissed its $444 million claim against FTX. The defunct crypto lender had claimed that FTX officials had undermined its reputation, making “baseless and derogatory statements” that contributed to its downfall in 2022, seeking up to $2 billion in damages.

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