- Backpack has responded to FTX’s clarification regarding the alleged acquisition of FTX EU, denying misrepresentation
- Backpack admits that it hasn’t completed the purchase of FTX EU but states that it has started the process
- The company says it hopes to complete the process soon
Backpack, a crypto wallet company, has addressed claims by FTX regarding an alleged misrepresentation of its plans to acquire FTX EU, the European arm of the bankrupt cryptocurrency exchange. Backpack asserts that it has not misrepresented its intentions, emphasizing that its earlier statements claiming a purchase were based on good faith negotiations. FTX underscored that no binding agreement has been finalized and highlighted the importance of creditor approval for any such deal.
Backpack Jumps the Gun
The dispute began when reports emerged on Tuesday that Backpack had bought FTX EU for $32.7 million, stating its aim to expand its footprint in the cryptocurrency ecosystem. Shortly after, FTX released its own statement refuting the certainty of the deal, explaining that no final agreement exists, noting, “We wish to clarify that no binding agreement has been reached with Backpack regarding the sale of FTX EU.”
The exchange emphasized the need for creditor input and regulatory approvals, citing its commitment to a transparent process for maximizing recoveries for stakeholders.
Backpack responded firmly to FTX’s comments Wednesday, maintaining that its announcement reflected ongoing negotiations. In its statement, the company said it “categorically denies any misrepresentation” and emphasized its commitment to securing an agreement.
Backpack explained that its communications were based on “good faith negotiations” with FTX and underscored its dedication to moving forward with the acquisition. The company did not, however, address specific points raised by FTX regarding creditor approvals or regulatory hurdles.
Challenges Ahead for the Deal
The disagreement highlights the complexities of acquisitions involving entities in bankruptcy, with FTX’s clarification signaling that significant legal and financial barriers remain before any potential deal can be finalized. The exchange stated that “any transaction involving FTX EU will be conducted in accordance with applicable laws and with the best interests of creditors in mind.”
Both companies appear to remain in discussions, but the timeline for reaching a binding agreement remains unclear. Backpack’s desire to acquire FTX EU is understandable, however, given that it holds an MiFID II-license under the Cyprus Securities and Exchange Commission.
