In a significant development within the cryptocurrency sector, Backpack Exchange has officially launched its European division, Backpack EU, establishing a regulated platform for trading crypto derivatives. Operating from Cyprus under the European Union’s MiFID II regulations, Backpack EU aims to be among the first fully compliant exchanges in Europe offering perpetual futures, a type of advanced trading product.
CEO Armani Ferrante highlighted the exchange’s unique position, stating, “As far as I’m aware, it’s just going to be us and Kraken” as the only platforms providing perpetual futures in the region. This launch follows the company’s acquisition of FTX EU earlier this year, despite initial legal hurdles related to the unapproved sale from the FTX bankruptcy estate. Since addressing these issues, Backpack has begun fulfilling its commitments to reimburse customers impacted by the collapse of FTX, reflecting its dedication to restoring trust in the cryptocurrency market.
Backpack EU is set to offer users access to over 40 trading pairs with leverage up to 10x, catering to both retail and institutional traders. This move is part of a broader strategy aimed at revitalizing confidence in digital assets, especially after a series of exchange failures that have shaken the industry. Ferrante emphasized the importance of trust, stating, “You give trust by doing good things every day over a long period of time.” The exchange’s commitment to transparency is further underscored by its daily publication of validators’ attestations using zero-knowledge proofs.
“It should be the bar. You can do this every day, there’s no reason why you can’t,” Ferrante added.
Since the beginning of 2024, Backpack has reportedly processed over $160 billion in global trading volume, indicating a strong market presence. Looking ahead, plans for expansion include targeting the Japanese market, with Ferrante expressing confidence in replicating their regulated model in other regions.
Backpack EU Launch: Key Highlights
Backpack Exchange has launched its European division, Backpack EU, spotlighting significant developments in the cryptocurrency trading landscape.
- Official Launch: Backpack EU goes live, operating from Cyprus.
- Regulatory Framework: Licensed under the EU’s MiFID II, ensuring compliance with European regulations.
- Crypto Derivatives Offerings: First regulated exchange in Europe to provide crypto derivatives, including perpetual futures.
- Market Position: Competes with Kraken for offering perpetual futures in Europe, emphasizing its unique market stance.
- Acquisition of FTX EU: The exchange resolved legal issues following the acquisition, redistributing funds to affected users.
- Trading Features: Offers over 40 trading pairs with up to 10x leverage for users.
- Trust-Building Strategy: Focused on restoring trust in digital assets after past exchange failures, emphasizing consistent ethical practices.
- Proof-of-Reserves System: Implements daily attestation of reserves using zero-knowledge proofs to enhance transparency.
- High Trading Volume: Processed over $160 billion in trading volume globally since 2024.
- Future Expansion: Plans to obtain licensing and expand operations in Japan.
“You give trust by doing good things every day over a long period of time. It takes time to build trust and a single day to lose it.” – Armani Ferrante, CEO of Backpack
Backpack EU Launches in Europe: A New Contender in Crypto Derivatives
Backpack EU’s recent launch as a regulated cryptocurrency trading platform marks a significant step in the competitive landscape of crypto derivatives in Europe. Positioned strategically under the EU’s MiFID II framework, the exchange’s arrival brings unique advantages, particularly its ambition to restore trust in digital assets following turbulent market events, such as the collapse of FTX. With the debut of perpetual futures, Backpack sets itself apart as one of the limited players alongside Kraken, suggesting a potentially competitive edge in terms of brand trust and regulatory compliance.
One key advantage of Backpack EU is its commitment to transparency. The implementation of a proof-of-reserves system, utilizing daily attestations through zero-knowledge proofs, positions it as a pioneering platform in fostering security and trustworthiness within the crypto space. As customers increasingly seek reliable trading environments post-FTX, this proactive measure could attract both retail and institutional traders looking for compliant options to engage with digital assets. This is especially pertinent as many exchanges have faced scrutiny and skepticism due to recent failures.
However, the platform is not without challenges. The shadow of FTX’s controversial history looms large, and while Backpack has made strides to distance itself by compensating affected customers, market perceptions may take time to shift. Investors who remain wary may hesitate to jump on board, concerned about the broader implications of the previous ownership and associated risks in the crypto derivatives sector. Moreover, intense competition with established players like Kraken may pose ongoing hurdles in capturing market share, especially as they have already built a loyal user base.
This launch might significantly benefit traders in search of a regulated trading environment, offering over 40 trading pairs with attractive leverage options. However, it could also create obstacles for less compliant exchanges, forcing them to enhance their security protocols and transparency to retain user trust. As the regulatory environment continues to evolve, Backpack EU’s initiative could serve as a motivator for industry-wide reforms, influencing how platforms adapt to new standards and consumer demands in the dynamic crypto landscape.
