Introduction
In January 2023, cryptocurrency exchange Backpack announced its acquisition of FTX’s European arm, FTX EU. This development has sparked significant controversy among stakeholders, including FTX creditors and legal experts. The acquiring process was supposedly approved by the bankruptcy court, but neither FTX nor the court has confirmed this. Additionally, Backpack has claimed that it was not properly informed or authorized to manage creditor repayments for FTX customers.
FTX’s Claims
FTX has filed multiple lawsuits against Backpack, alleging that the acquisition of its European operations was not approved by the bankruptcy court and that Backpack had not obtained necessary authorizations from FTX. According to FTX’s official statement, the company had already informed Backpack about certain agreements between former insiders involved in the sale process. However, Backpack claims it was unaware of these transactions when it executed the acquisition.
Backpack’s Defense
Backpack founder Armani Ferranti defended the purchase, stating that his exchange would not be able to manage creditor repayments until it had secured the necessary approvals from FTX. He also mentioned that FTX customers should expect payments as early as February 2023. However, FTX has denied these claims, asserting that Backpack’s acquisition was never completed and that all information exchanged by Backpack was shared without its knowledge.
Reliance on the Bankruptcy Court
The acquiring process for FTX EU was supposed to be approved by the US Bankruptcy Court for the District of Delaware. Backpack has stated that it was not informed about an indirect transfer of FTX EU to itself, which it claims constitutes a violation of court-ordered procedures. FTX, on the other hand, argues that neither it nor the court were made aware of this arrangement before Backpack made its announcement.
Customer Claims
FTX customers are also involved in legal battles over the acquisition. FTX has claimed that backpack had not been authorized to manage creditor repayments for FTX customers or any former clients. Additionally, FTX stated that it is solely responsible for returning any funds owed to its customers, including those who invested in FTX’s services.
Updates and Developments
In January 2023, FTX announced a reorganization plan aimed at addressing its bankruptcy and complying with court orders. This plan includes the creation of "convenience classes," which will be the first group of customers to receive creditor reimbursements. According to FTX’s website, these classes include users who are seeking reimbursement for damages or losses related to the exchange’s collapse.
Conclusion
The acquisition dispute between FTX and Backpack remains unresolved, with both parties citing different versions of events. The legal battle has drawn significant attention from stakeholders in the crypto industry, including regulators and investors. As the case continues to unfold, it is likely to have further implications for the stability and future operations of both exchanges.
