FTX Issues Clarification on Backpack’s Acquisition and Fund Repayment Claims

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

In an announcement launched on January 8, the failed crypto agency clarified that the U.S. Chapter Court docket has not authorised the sale of FTX EU to Backpack, nor has it been approved to handle fund distributions to collectors.

Deceptive Assertion

On January 7, international crypto-trading platform Backpack announced by means of social media that it had acquired FTX EU and would deal with creditor repayments for European clients as a part of a court-approved chapter course of. Additional, founder Armani Ferrante emphasized 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 international locations, the trade additionally claimed that the acquisition had obtained approval from the Cyprus Securities and Alternate Fee (CySEC) with plans to develop by means of crypto by-product companies similar to spot, margin, and futures buying and selling throughout the EU.

Nevertheless, FTX denied these claims, stating that Backpack’s press launch and associated web site contained a number of doubtlessly deceptive data. 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 court docket 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 carried out with out its information or the court docket’s approval.

Backpack Has No Position in Fund Redistribution

Additional, the statement pressured that Backpack has no authorization to make distributions to any collectors or clients, together with former European shoppers. The defunct trade reiterated that FTX EU itself stays solely answerable for returning funds to its clients.

“FTX won’t be answerable for the reimbursement of any funds owed by FTX EU to its former clients 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 clients 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 file 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 appeal 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 popularity, making “unsubstantiated and disparaging statements” that contributed to its downfall in 2022, asking for as much as $2 billion in damages.