The FTX EU Bankruptcy Saga Continues as the Estate Disputes the Sale to Backpack

The FTX bankruptcy estate has disputed the recently announced sale of FTX EU to Backpack, a cryptocurrency exchange and wallet firm founded by former FTX and Alameda employees. The FTX estate said Backpack “has no involvement whatsoever in the U.S. Bankruptcy Court-approved process for returning funds to any FTX customers and other creditors,” and that a press release about the sale from Backpack on Monday was issued without the knowledge or involvement of FTX. Backpack had announced plans to pay back FTX EU creditors, as well as setting out how it plans to operate a regulated crypto derivatives service using the licenses acquired in the sale. “Backpack has not been authorized by FTX to make any distributions to any FTX customers or other creditors, including any former FTX EU customers,” the FTX bankruptcy estate said in its statement. Backpack said it bought FTX EU from Gruhn and Matzkeon, a transaction that has also been completed and reflected on official public records since June 2024, and which has been approved by CySec, the Cyprus financial regulator. “As a licensed entity, the transfer of the FTX EU entity was subject to regulatory approval by CySec. In December 2024, CySec approved Backpack’s purchase following a lengthy diligence process. Following such approval, the FTX estate is obligated to transfer the shares as set out in the court-approved sales and purchase agreement. We look forward to the completion of the transfer so that, like the FTX bankruptcy estate, we can begin to return customer funds to former FTX EU customers,” Backpack said in a statement on Thursday. FTX EU will be renamed to Backpack EU and Backpack EU will be solely responsible for redistributing former FTX EU customer funds, Backpack said. Former FTX EU boss Patrick Gruhn said that in May of last year he initiated a change of control proceeding for the FTX EU Ltd. subsidiary with CySEC, which is required to transfer the shares of the regulated Investment Firm. “In this very complex Bankruptcy proceeding I assume FTX wanted to make clear that FTX has no direct relationship with Backpack and will not distribute funds from the U.S. bankruptcy estate. However, FTX EU will be renamed to Backpack EU and will of course distribute the former FTX EU funds to the clients,” Gruhn said via email.