A group of former FTX executives have come together to establish a new cryptocurrency exchange in Dubai, focusing on addressing the issue of securing customer funds that FTX failed to do. Can Sun, a former FTX lawyer, is leading the initiative with Trek Labs, a Dubai-based startup that obtained a license to offer cryptocurrency services in the region in late October. Trek Labs will operate under the name Backpack Exchange.
Assisting Sun in this venture is Armani Ferrante, a former FTX employee who is the CEO of Trek’s holding company in the British Virgin Islands. Ferrante also oversees Backpack, a cryptocurrency wallet that is integrated into Backpack Exchange. Sun’s former legal deputy at FTX, Claire Zhang, who is also Ferrante’s wife, is part of Trek’s executive team. However, Zhang plans to step back from the company once Trek secures an investment round, as she has been working without pay to help bootstrap the exchange.
related: FTX Token (FTT) Surges 53% and Erases Year-to-Date Losses
Sun and Ferrante are determined to apply the lessons learned from FTX’s failure to protect customer funds. Backpack’s technology offers a self-custody solution that incorporates a multiparty computation (MPC) technique to ensure the security of funds. MPC involves several parties approving a transaction before funds are moved. Additionally, Backpack will allow customers to verify their funds whenever they want, aiming to build trust and transparency in the post-FTX world.
The beta version of Backpack Exchange is currently available, with a wider launch expected later in the month. Sun was also a witness in Bankman-Fried’s recent fraud trial, where he disclosed that FTX’s former CEO sought legal justification from him for holding FTX’s funds in Alameda Research. Following this revelation, Sun stated that he resigned as FTX’s general counsel the day after learning about the use of customer money.
The former FTX empire, led by Bankman-Fried, had commingled billions of dollars of customer funds through Alameda Research for investment purposes, leading to approximately $9 billion in customer funds going missing. The team behind Backpack Exchange is determined to provide a secure and trustworthy alternative to other players in the cryptocurrency exchange space and is taking steps to safeguard customer funds and provide greater transparency for their users.