A group of former FTX and Alameda Research employees have raised $17 million to build out a crypto exchange called Backpack, joining the ranks of startups seeking to fill a gap left by the collapse of their former employer Sam Bankman-Fried's crypto empire.
Backpack, a Dubai-based company which also offers a crypto wallet and an NFT collection called Mad Lads, said it reached a $120 million valuation with the Series A round. Armani Ferrante, its chief executive officer and co-founder, was an early employee of Alameda Research. Another co-founder, Can Sun, was FTX's former general counsel. Five of its 40 workers were former FTX employees.
The exchange was launched in October 2023 and has gained a virtual-asset service provider license in Dubai. The funding round was led by Placeholder VC, a crypto venture firm, with participation from Wintermute, Robot Ventures, Selini Capital, Amber Group and others. The company is entering the U.S. in certain states.
"Creating an exchange today is very different than creating an exchange a year or two years ago," Ferrante said. "Especially after the catastrophe that was FTX, I think the bars are so much higher now."
For a period after FTX's collapse, "we've gone into business meetings where counterparts, because of our former FTX work experience, have decided that it was too risky to work with us," Sun said. "We've not seen that as much since then."
The Backpack exchange has more than 420,000 verified users globally, and is popular among Chinese-speaking users, the company said. "There's a huge market in Asia for crypto trading venues," Ferrante said. It reached $6.53 billion of one-side trading volume in February, according to the company.
Backpack is among recent debuts that are capitalizing on opportunities created by the demise of FTX. EDX Markets, the crypto-trading venue backed by Citadel Securities and Fidelity Digital Assets, went live last year and is expanding into Singapore. In Europe, Rulematch was launched in December, targeting financial institutions.
Ferrante, who studied computer science at the University of California, Berkeley, got into crypto when he met Bankman-Fried and joined Alameda to work on its trading system during a brief stint in 2018. Later, he became a key developer on the Solana blockchain. A startup he created lost about 80% of its operating capital on FTX when the exchange failed.
Sun testified during Bankman-Fried's criminal trial in New York in October. He said he was unaware of the company's misuse of customer funds until its final days and declined to come up with a legal justification to explain the missing customer money when asked by Bankman-Fried. Sun had a non-prosecution agreement with the US government.
Claire Zhang, a former FTX employee and Ferrante's wife, is also working for Backpack, focusing on operations. Another core team member, Tristan Yver, was formerly with FTX US.
