Can Sun, former general counsel of crypto exchange FTX, and Armani Ferrante, former software developer of crypto trading firm Alameda Research, have joined forces to found a new cryptocurrency exchange in Dubai, called Backpack Exchange.
Backpack Exchange is backed by Trek Labs Ltd FZE, a new entity founded by Can Sun. Trek Labs announced on October 31 that it had obtained a Virtual Asset Service Provider (VASP) license for Exchange Services from the Dubai Virtual Assets Regulatory Authority (VARA).
Dubai Grows its Crypto Presence
A VASP license is a regulatory requirement for any company that operates a crypto exchange in Dubai. The license ensures that crypto exchanges are operating in a compliant and responsible manner, and that they are protecting the interests of their customers.
In addition to Sun and Ferrante, Claire Zhang, former counsel assistant of FTX and Ferrante’s wife, is also a Backpack’s founding member. However, Zhang will step down from the board after Trek Labs secures funding.
Having witnessed the challenges faced by FTX in safeguarding customer funds, Ferrante and Sun have drawn valuable lessons and incorporated them into Backpack’s design.
“In a post-FTX world, you need trust and transparency to create a true alternative to the other players,” said Can Sun.
In recent months, Backpack’s team has diligently crafted a next-generation exchange incorporating innovative features such as “zero-knowledge proof of reserves (zk-proofs), Multi-Party Computation (MPC) for custody, and low latency order execution.”
In an official press release, the company announced the successful acquisition of licenses in various global jurisdictions, accompanied by the establishment of premium fiat on and off ramps, enhancing the user experience.
The strategic alignment between Backpack Exchange and Backpack Wallet, presently an unregulated product, is designed to facilitate users with a smooth transition from traditional fiat to on-chain applications.
Backpack Exchange is currently in the beta phase and is only accessible to those with an invite code. The team plans to officially introduce the product by the end of this month.
FTX’s Aftermath is Not Over Yet
Can Sun was among key witnesses in Sam Bankman-Fried’s criminal trial earlier this month. The former executive testified that he had no knowledge of FTX lending customer funds to Alameda Research and that he did not approve of such a transaction.
Sun worked as general counsel for FTX from August 2021 until its bankruptcy in November 2022.
The aftermath of FTX’s bankruptcy is not over. The company is still in the process of liquidating its assets and paying back its creditors. There are also a number of ongoing investigations into the company’s collapse. Most importantly, the downfall eroded trust of crypto members in the company
Sun’s plan to introduce a crypto exchange came after former FTX CEO, Sam Bankman-Fried, pled guilty to all charges earlier this month. He now faces a potential 115-year prison sentence with each charge ranging from 10 to 20 years.
Meanwhile, FTX’s current team is also working on reviving the exchange. FTX announced in June that it is holding talks with investors to support the restart of its global trading platform.
Blockchain technology company Figure has also expressed interest in helping to restore FTX 2.0. Figure had participated in a bidding war to restart the previously bankrupt Celsius Network trading platform.
CEO John J. Ray III, who took over the company after FTX filed for bankruptcy in November 2022, hinted at the rebranding plan in January, saying that the company has begun the process of soliciting interested parties in preparation for the restart of the FTX exchange.
While FTX has made progress in its repayment plans, the company still owes customers over $8 billion. With such a bad story still in play, people may avoid anyone connected to FTX.