Former FTX General Counsel To Launch New Crypto Exchange With Focus On Trust

Key Points:

• Ex-FTX executives, led by former FTX general counsel Can Sun, launched Backpack Exchange to address FTX’s past issues.
• Backpack Exchange plans to sell a 10% stake for over $100 million, focusing on transparency.
• Sun, a key FTX witness, emphasizes trust and transparency lessons in the post-FTX era.

In the aftermath of the FTX bankruptcy, a group of former FTX executives, led by Can Sun, the former FTX general counsel, is joining forces to establish a new cryptocurrency exchange.

Former FTX General Counsel Unveils Backpack Exchange

The initiative aims to address the issues that led to the downfall of their previous employer. Sun, a key witness in the criminal trial of ex-FTX CEO Sam Bankman-Fried (SBF), testified against SBF under a no-prosecution agreement.

The Wall Street Journal reports that Sun is spearheading the new exchange, which is set to launch in beta later this month. The venture seeks to sell a 10% stake to investors at a valuation exceeding $100 million.

Sun’s involvement was not initially disclosed when Backpack, the Web3 digital wallet company founded by Armani Ferrante, announced the exchange last month. Claire Zhang, Ferrante’s wife and a former legal deputy of Sun’s, is also part of the executive board of Trek Labs, the Dubai-based entity operating as Backpack Exchange.

Trek Labs has obtained a license from the Dubai Virtual Assets Regulatory Authority (VARA), regulating digital assets in the region. Sun’s Trek Labs employs former FTX legal and compliance staff, with transparency being a key focus. The former FTX general counsel emphasized the importance of trust and transparency in the post-FTX landscape.

Can Sun and Team Pivot from FTX’s Lessons

Backpack Exchange plans to utilize Backpack’s technology to enable users to hold funds in their own “self-custody” crypto wallets, employing multiparty computation techniques for added security. Users will have the ability to verify their holdings independently.

FTX, under SBF, faced issues where customer and company funds were commingled, leading to a substantial loss of customer deposits. Sun, having cooperated with federal prosecutors, aims to build a crypto exchange with a commitment to trust and transparency, setting it apart in the evolving crypto landscape.

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