With an emphasis on doing what FTX failed to accomplish, which is secure customer cash, a group of former FTX executives have joined forces to assist in the development of a new cryptocurrency exchange in Dubai. With Trek Labs, a Dubai-based business that was granted permission to provide bitcoin services in the area in late October, ex-FTX attorney Can Sun is spearheading the charge.Trek Labs will market those services under the name Backpack Exchange.
As the CEO of Trek’s holding company in the British Virgin Islands, Armani Ferrante, a former employee of FTX, will assist Sun, the Wall Street Journal reported on November 11.Additionally, Ferrante is the owner of Backpack, a bitcoin wallet that is a part of Backpack Exchange.Claire Zhang, Ferrante’s wife and Sun’s former legal deputy at FTX, is a member of Trek’s executive team.Zhang, however, intends to leave Trek once it secures an investment round because she has been working for free to “help bootstrap the exchange,” according to the Wall Street Journal.
Ferrante and Sun emphasized that they wished to apply the knowledge gained from FTX’s inability to safeguard client money.With the use of multiparty computation (MPC) technology, Backpack’s technology provides a self-custody solution that guarantees the security of cash.Before any money is sent, an MPC transaction usually requires the approval of multiple parties.
It will also enable Backpack customers to verify funds whenever they want, Sun told WSJ.
“In a post-FTX world, you need trust and transparency to create a true alternative to the other players.”
According to the company, Backpack Exchange will launch more broadly later this month after completing its beta testing.As a testimony in the current fraud trial of Bankman-Fried, Sun disclosed that the former CEO of FTX had approached him in search of a legal explanation for why FTX’s money were held by Alameda Research. Bankman-convicted Fried on all seven counts pertaining to fraud.
The day after Bankman-Fried informed him about the use of customer funds, Sun claimed to have resigned from his position as general counsel at FTX.
“This went against everything that I stood for and was represented to me by Sam.”
Nine billion dollars in client monies were lost when Bankman-Fried’s old empire mixed billions of dollars of customer funds through Alameda Research for investment purposes.