Backpack, a Web3 digital wallet company, has revealed its upcoming launch of a cryptocurrency exchange. This move comes after successfully acquiring a crucial license from the Dubai Virtual Assets Regulatory Authority (VARA).
Initiated by Coral, a prominent crypto infrastructure company, Backpack emphasized that its new exchange will operate under regulatory oversight, having obtained a Virtual Asset Service Provider (VASP) license from VARA.
The company announced, “Backpack Exchange has introduced an advanced exchange featuring innovative technologies such as zero-knowledge proof of reserves (zk-proofs), Multi-Party Computation (MPC) for custody, and low-latency order execution.”
VARA, responsible for overseeing “all virtual asset activities across the Emirate of Dubai,” plays a pivotal role in the regulation of the digital asset sector in the region.
Armani Ferrante, the CEO and founder of Backpack, faced significant challenges in the past year. The former engineer at Alamada Research managed to secure $20 million for Coral in a funding round co-led by FTX Ventures shortly before the collapse of the FTX exchange. Following this setback, Ferrante was compelled to take action as Coral incurred a substantial loss of approximately $14.5 million from FTX’s investment.
Ferrante’s decision to establish his own exchange appears to have been influenced, at least in part, by the turmoil caused by the FTX exchange’s demise. He expressed,
“It’s time to put an end to the days of opaque crypto exchanges representing everything our industry stands against. It shouldn’t be normal to use an exchange with a single point of failure, without proof of reserves, or without auditability.“
The new exchange is scheduled to enter the beta testing phase in November, with plans to become fully operational for the general public in the first quarter of 2024, as stated by Backpack. The company also noted that its compliance team boasts professional experience with renowned institutions such as Barclays, State Street, HSBC, and Coinbase.