VCs are backing a crypto startup led by former FTX and Alameda Research employees as part of a new crypto exchange.
In a series A funding round, alums from FTX and Alameda raised $17 million for a crypto exchange called Backpack, which valued the company at $120 million and pulled capital investment from firms like Wintermute and Amber Group.
Backpack was launched in October last year, nearly a year after FTX collapsed, and is co-founded by Armani Ferrante and Can Sun. Ferrante serves as Backpack’s CEO and was an early Alameda employee.
Sun, who testified as a government witness in Sam Bankman-Fried’s fraud, worked as FTX’s general counsel and said he was oblivious to the firm’s illegal use of customer’s crypto and funds. Backpack has a 40-person workforce, five of whom are former FTX employees.
Ferrante said expectations and scrutiny are certainly higher regarding building a crypto exchange following FTX’s saga. Initially, entities steered clear of investing in Backpack, but things have improved following last year’s conviction in a New York courthouse, Ferrante noted.
Backpack is a Dubai-based exchange that has already onboarded 420,000 users worldwide. The company recorded $6.5 billion in one-way trading volume this month and is reportedly seeing demand in Asian markets as it hopes to claim some market share left behind by FTX.
Other firms are also rushing in to fill the gap, particularly for professional traders, one of FTX’s primary customer bases. For instance, Fidelity-based EDX Markets launched in 2023 with expansion into Singapore.
Ferrante and Sun are working past their Alameda ties, but Bankman-Fried faces repercussions following a court’s guilty verdict. The former tycoon has pleaded with a judge to shorten his sentence to a maximum of six-and-a-half years, citing his autism and saying he is “deeply sorry” for the $8 billion fraud.
Federal prosecutors will publish their recommended sentence length on Mar. 15, with sentencing occurring on Mar. 28.