FTX Estate Disputes Sale of FTX EU to Backpack
The FTX bankruptcy estate has expressed concerns over the recent announcement by Backpack, a cryptocurrency exchange and wallet firm founded by former FTX and Alameda employees, regarding the sale of FTX EU. According to the FTX estate, Backpack "has no involvement whatsoever in the U.S. Bankruptcy Court-approved process for returning funds to any FTX customers and other creditors." This statement comes after Backpack released a press release detailing its plans to pay back FTX EU creditors and establish a regulated crypto derivatives service using licenses acquired in the sale.
The FTX estate has emphasized that Backpack was not authorized to make any distributions to FTX customers or other creditors, including former FTX EU customers. In March 2024, the FTX bankruptcy court approved the sale of FTX EU to Patrick Gruhn and Robin Matzke, the co-founders of Digital Assets, which was later acquired by Sam Bankman Fried in 2021. Gruhn and Matzke stayed on to lead FTX’s expansion into Europe.
In an attempt to clarify the situation, Backpack released a statement stating that it had purchased FTX EU from Gruhn and Matzke, a transaction that has been completed and reflected in official public records since June 2024. The sale was approved by CySec, the Cyprus financial regulator, following a lengthy diligence process. According to Backpack, the FTX estate is obligated to transfer shares as set out in the court-approved sales and purchase agreement.
However, the FTX estate disputes this assertion, stating that Backpack "has not been authorized by FTX to make any distributions to any FTX customers or other creditors." This has led to confusion regarding the ownership and control of FTX EU. Former FTX EU boss Patrick Gruhn weighed in on the matter via email, stating that he initiated a change of control proceeding for the FTX EU Ltd. subsidiary with CySEC in May last year.
"The purpose of this very complex Bankruptcy proceeding is to make clear that FTX has no direct relationship with Backpack and will not distribute funds from the U.S. bankruptcy estate," Gruhn explained. "However, FTX EU will be renamed to Backpack EU and will of course distribute the former FTX EU funds to the clients."
The dispute highlights the complexities surrounding the sale of FTX EU and the distribution of customer funds. The FTX estate’s assertion that Backpack was not authorized to make distributions raises questions about the legitimacy of the sale. In contrast, Backpack has stated that it is committed to returning customer funds to former FTX EU customers and establishing a regulated crypto derivatives service.
The situation is likely to continue unfolding in the coming days as both parties engage in a public exchange over the ownership and control of FTX EU. The fate of FTX’s European operations remains uncertain, leaving many questions unanswered about how customer funds will be distributed and what impact this will have on the broader cryptocurrency market.
FTX Estate’s Dispute with Backpack: Key Points
- FTX estate disputes Backpack’s involvement in returning customer funds
- FTX estate emphasizes that Backpack was not authorized to make distributions
- Backpack claims it purchased FTX EU from Gruhn and Matzke, a transaction approved by CySec
- The sale of FTX EU has raised questions about ownership and control
- Customer funds remain uncertain
Conclusion
The dispute between the FTX estate and Backpack highlights the complexities surrounding the sale of FTX EU. As both parties engage in a public exchange over the ownership and control of FTX EU, it remains to be seen how customer funds will be distributed and what impact this will have on the broader cryptocurrency market.