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Highlights
- Backpack acquires FTX EU, gaining MiFID II license for European operations.
- CySEC suspends FTX EU's license, with reactivation expected by May 30, 2025.
- Backpack plans to expand crypto derivatives and futures offerings across Europe.
In a significant development in the European cryptocurrency market, Backpack Exchange has acquired the assets of the defunct FTX EU, the European arm of the once-prominent crypto exchange, FTX. This acquisition provides Backpack with the MiFID II authorization from the Cyprus Securities and Exchange Commission (CySEC), enabling it to offer regulated services across the European Union. While the acquisition has been officially approved by both the bankruptcy court and CySEC, challenges lie ahead as the license remains suspended.
Backpack’s Strategic Acquisition of FTX EU
FTX EU, which had operated under a MiFID II license since September 2022, allowed the exchange to provide its services across the EU. Backpack now gains the right to operate under the same MiFID II framework, positioning itself as a key player in the European crypto market. The acquisition provides Backpack with a competitive advantage, especially as other international exchanges exit the EU market. With the MiFID II authorization, Backpack aims to offer transparency and secure crypto trading in the European market, which is increasingly underserved.
Armani Ferrante, CEO of Backpack Exchange, emphasized the company’s commitment to meeting regulatory standards. Backpack plans to roll out innovative services, including crypto derivatives and perpetual futures, which are currently unavailable through regulated exchanges in the region. However, the company must navigate regulatory hurdles before these services can be launched.
CySEC License Suspension Presents Obstacles
Despite acquiring the MiFID II license, Backpack faces a significant challenge with the ongoing suspension of FTX EU’s license. Since the collapse of FTX, CySEC has repeatedly extended the suspension of the Cyprus Investment Firm (CIF) license, with the latest extension issued on November 5. According to official CySEC documents, the suspension will remain in place until at least May 30, 2025.
Backpack has stated that it is working on reactivating the license and plans to launch Backpack EU in Q1 2025. However, the extended suspension complicates the timeline for Backpack’s plans to fully launch its European operations. The company remains optimistic that the license will be reinstated ahead of the scheduled reactivation.
Expanding the Crypto Derivatives Market in Europe
As the European crypto landscape evolves, Backpack’s acquisition of FTX EU and its MiFID II license opens the door for new opportunities in the market. By offering regulated crypto derivatives and perpetual futures, Backpack aims to meet growing demand for such products, especially as local exchanges are slow to provide them.
Despite ranking lower in terms of daily trading volume on CoinMarketCap, Backpack’s strategic move to acquire FTX EU sets it up as a potential leader in the European crypto derivatives space. The firm plans to take advantage of the regulatory environment to offer secure, transparent, and compliant crypto products across the EU, with the goal of creating a strong presence in the market by 2025.
As the company works through the regulatory process and focuses on reactivating the license, industry watchers will be keeping a close eye on how Backpack navigates the challenges ahead and whether it can fulfill its ambitious plans for growth in the European market.
