Several former FTX executives have teamed up to help build a new cryptocurrency exchange in Dubai with a particular focus on what FTX failed to do – secure client funds.
Former FTX lawyer Can Sun is leading the way with Trek Labs, a Dubai-based startup that received a license to offer cryptocurrency services in the region in late October. Backpack Exchange is the name under which Trek Labs will provide these services.
Sun will receive support from former FTX employee Armani Ferrante, who serves as CEO of Trek Holdings in the British Virgin Islands, according to a November 11 Wall Street Journal report. Ferrante also runs Backpack, a cryptocurrency wallet integrated into the Backpack Exchange.
Sun’s former legal representative at FTX, Claire Zhang, who is also Ferrante’s wife, is also a member of Trek’s executive team. However, once Trek makes an investment round, Zhang plans to move on from the company because she was working unpaid to “help bootstrap the stock market,” the Wall Street Journal reported.
Sun and Ferrante reiterated their desire to use lessons learned from FTX’s failure to protect client funds. Backpack technology provides a self-custody solution that integrates multi-party computation (MPC) technology to ensure funds remain safe. MPC typically involves multiple parties agreeing to a transaction before funds are transferred.
As things get worse, please be aware of the rise in phishing attacks.
The backpack will never ask you for your private keys.
The only valid website URLs are in our bio. Assume anything else is a scam.
Stay safe.
-Backpack (@xNFT_Backpack) November 11, 2023
It will also enable Backpack customers to check funds whenever they want, Sun told the Wall Street Journal:
“In a post-FTX world, you need trust and transparency to create a real alternative for other players.”
Backpack Exchange is currently in beta and will be launched more widely later this month, the company said.
Sun was a witness in the recent Bankman-Fried fraud trial where he revealed that the former FTX CEO turned to him for a legal justification for why FTX’s money was in Alameda Research. Bankman-Fried was found guilty of all seven counts of fraud.
Related: How long can Sam Bankman Fred serve in prison? Crypto lawyers weigh in
Sun said he resigned from his position as FTX’s general counsel the day after Bankman-Fried told him about the use of client funds.
“This goes against everything I stand for and Sam stands for me.”
The former Bankman-Fried empire shuffled billions of dollars in client funds through Alameda Research for investment purposes. About $9 billion in customer funds disappeared.
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