FTX and Alameda Vets’ New Exchange ‘Backpack’ Raises $17 Million

Backpack, a cryptocurrency exchange led by former FTX and Alameda Research employees, raised $17 million.

The Series A funding round values Backpack — whose offerings also include a crypto wallet and NFT collection — at $120 million, Bloomberg reported Wednesday (Feb. 28).

Members of the company told the news outlet they aim to fill a void left by the collapse of their former employers, although that collapse has made their job more challenging.

“Creating an exchange today is very different than creating an exchange a year or two years ago,” said CEO Armani Ferrante, an early Alameda hire, in the report. “Especially after the catastrophe that was FTX, I think the bars are so much higher now.”

Following FTX’s bankruptcy, Backpack’s principals took meetings “where counterparts, because of our former FTX work experience, have decided that it was too risky to work with us,” added Can Sun, FTX’s former general counsel and a Backpack co-founder. “We’ve not seen that as much since then.”

Sun was a prosecution witness during the trial of FTX founder Sam Bankman-Fried, who was convicted last year of masterminding the fraud that led to the company’s downfall.

Hired in August 2021, Sun testified that — based on numerous conversations he had with Bankman-Fried — he believed that FTX customers’ deposits were safe and segregated from the company’s funds.

Based in Dubai, Backpack launched last fall. Per the Bloomberg report, the exchange has more than 420,000 verified users worldwide, recently reaching $6.5 billion in one-sided trading volume.

Meanwhile, attorneys for Bankman-Fried said this week that their client should spend no more than six-and-a-half-years in prison, and not the 100 years recommended by probation officials, calling the one-time crypto wunderkind a misunderstood first-offender.

“He was making thousands of business decisions a day, for the first time, in an immature and undisciplined cryptocurrency market, surrounded only by a group of similarly inexperienced (albeit very bright) 20-somethings,” the filing said. “He was, in essence, flying by the seat of his cargo shorts.”

Bankman-Fried is due to be sentenced March 28.

For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.