Former workers of FTX and Alameda Research have secured $17 million to establish Backpack, a cryptocurrency exchange. They are among the businesses attempting to bridge the void created by the demise of their previous employer, Sam Bankman-Fried’s cryptocurrency conglomerate.
Backpack is worth $120 million after completing a Series A investment round; the company’s products also include an NFT collection and a cryptocurrency wallet, according to a Bloomberg report on Wednesday.
Placeholder VC, a venture capital firm that specializes on web3s, led the round, in which Hashed, Robot Ventures, Amber Group, Wintermute, and Selini also participated.
Bloomberg: FTX, Alameda Alums Raise $17 Million for Crypto Exchange Startup.
— Crypto Crib (@Crypto_Crib_) February 28, 2024
Backpack: Crypto’s Future After FTX Downfall?
Almost a year after FTX’s demise, Armani Ferrante and Can Sun co-founded Backpack, which debuted in October of last year. Ferrante was an early employee at Alameda and now serves as CEO of Backpack; he has been a contributor to Solana for a long time.
As general counsel for FTX, Sun provided testimony as a government witness in Sam Bankman-Fried’s fraudulent scheme. He claimed to be unaware of the company’s improper use of customers’ cryptocurrency and money. Among the 40 workers at Backpack are five ex-FTX personnel.
Ferrante, Sun, and their team have successfully navigated a new path in spite of the lingering effects of their previous associations. They have amassed a global user base of over 420,000 verified aficionados and obtained a highly sought-after virtual asset service provider license in Dubai.
Backpack runs a cryptocurrency exchange that is now accessible in the United States as of last week. It also runs the Mad Lads NFT collection and a digital wallet platform.
Ferrante emphasized that starting a bitcoin exchange today is very different from starting one or two years ago. The bar for these kinds of projects, he feels, has raised considerably, especially since the FTX catastrophe.
Backpack is the latest in a line of new ventures that have sprung up to capitalize on opportunities left by the fall of FTX. Launched last year, EDX Markets is now growing into Singapore with the support of Citadel Securities and Fidelity Digital Assets. Financial institutions were the primary targets of Rulematch’s December launch in Europe.
Update On Sam Bankman-Fried Case
In another development, legal counsels for Sam Bankman-Fried, who founded the now-bankrupt cryptocurrency exchange FTX, stated this week that their client should serve a maximum of six and a half years in prison rather than the hundred years that probation officials had suggested. They described the former crypto wunderkind a “a misunderstood first-offender.”
Meanwhile, Bankman-Fried has been making surprising assertions while incarcerated. After being found guilty on crimes related to the demise of FTX, he has been detained at the Metropolitan Detention Center in Brooklyn since the summer of last year, awaiting sentencing.
According to those with knowledge of the situation, Bankman-Fried has been promoting Solana (SOL) investments while incarcerated.
Citing his “autism,” the former mogul has begged the judge to reduce his sentence to a maximum of six and a half years, expressing his sincere apologies for the $8 billion scam.
On March 15, federal prosecutors will release their suggested sentence length; sentencing will take place on March 28.
Featured image from Pexels, chart from TradingView
