FTX says Backpack acquisition of EU arm not court-approved

FTX (CRYPTO:FTT), the bankrupt cryptocurrency exchange, has announced that the acquisition of its European arm, FTX EU, by crypto exchange Backpack has not been approved by the bankruptcy court.

The statement also clarified that Backpack has not been authorised to distribute funds to FTX creditors.

Backpack had announced on January 7 that it acquired FTX EU and would be responsible for repaying creditors to European customers as part of the court-supervised bankruptcy process.

Backpack’s founder, Armani Ferrante, indicated that the exchange would not operate in the EU until it was able to repay creditors, with plans to begin repayments by February.

However, in a statement released on January 8, FTX refuted Backpack's claims, stating that the acquisition had not yet occurred and had not been approved by the U.S. Bankruptcy Court for the District of Delaware.

FTX added that all public statements by Backpack had been made without their knowledge.

FTX further explained that while there was a prior agreement to sell FTX EU to certain former insiders, it had not been informed about the indirect transfer of the European arm to Backpack until this week.

FTX also emphasised that Backpack has not been authorised to manage any repayments.

"Backpack has not been authorised by FTX to make any distributions to any FTX customers or other creditors," the statement read.

FTX remains solely responsible for returning funds to its former customers.

In its own announcement, Backpack stated that the acquisition would help expand its footprint in Europe, leveraging FTX’s Markets in Financial Instruments Directive and Regulation (MiFID II) license.

Backpack, founded by Solana developer Ferrante in 2022, had previously secured $20 million in funding from FTX and Jump Crypto to build its exchange.

Despite losing $14.5 million during FTX’s collapse, Backpack continues to operate with minimal funds.

FTX’s reorganisation plan took effect on January 3, with creditors set to begin receiving repayments.

At the time of reporting, the FTX (FTT) price was $2.78.