FTX Points Clarification on Backpack’s Acquisition and Fund Compensation Claims

Bankrupt cryptocurrency alternate FTX has responded to current claims by Backpack relating to the acquisition of its European arm, FTX EU, and the reimbursement of buyer funds.

In a press release launched on January 8, the failed crypto agency clarified that the U.S. Chapter Court docket has not accepted the sale of FTX EU to Backpack, nor has it been licensed to handle fund distributions to collectors.

Deceptive Assertion

On January 7, international crypto-trading platform Backpack introduced by way of social media that it had acquired FTX EU and would deal with creditor repayments for European prospects as a part of a court-approved chapter course of. Additional, founder Armani Ferrante emphasised that the agency was dedicated to working with all related events to prioritize the return of buyer funds within the bloc.

With a presence in over 150 nations, the alternate additionally claimed that the acquisition had acquired approval from the Cyprus Securities and Change Fee (CySEC) with plans to broaden by way of crypto spinoff companies resembling spot, margin, and futures buying and selling throughout the EU.

Nonetheless, FTX denied these claims, stating that Backpack’s press launch and associated web site contained a number of doubtlessly deceptive info. It clarified that its subsidiary, FTX Europe AG, nonetheless holds 100% of the share capital of FTX EU.

The corporate additionally mentioned that though a previous settlement was made beneath courtroom supervision to switch FTX EU shares to former insiders of FTX Europe, this switch has not but occurred. It claimed that the oblique switch of the previous to Backpack, organized by these insiders, was accomplished with out its data or the courtroom’s approval.

Backpack Has No Function in Fund Redistribution

Additional, the assertion confused that Backpack has no authorization to make distributions to any collectors or prospects, together with former European shoppers. The defunct alternate reiterated that FTX EU itself stays solely chargeable for returning funds to its prospects.

“FTX won’t be chargeable for the reimbursement of any funds owed by FTX EU to its former prospects and expressly disclaims any duty for such reimbursement by FTX EU,” learn the disclosure.

It additionally defined that the quantities owed by its subsidiary to its prospects have additionally not been decided by the related entities.

In a associated replace, the outfit confirmed the effectiveness of its Chapter 11 plan of reorganization on January 3, 2025, with an preliminary distribution report date set for a similar day. Pending regulatory compliance, distributions to comfort class claimants are anticipated inside 60 days.

Elsewhere, on January 2, one other troubled crypto agency, Celsius, filed an enchantment difficult a earlier ruling that had dismissed its $444 million declare towards FTX. The defunct crypto lender had claimed that FTX officers had undermined its repute, making “unsubstantiated and disparaging statements” that contributed to its downfall in 2022, asking for as much as $2 billion in damages.