FTX Estate Rejects FTX EU Sale, Deems It ‘Unauthorized’ by Bankruptcy Court

• The FTX bankruptcy estate disputes Backpack’s claim that it can return funds to former FTX EU customers, and it says Backpack was not authorized to do so.

• Backpack insists it legally acquired FTX EU and received regulatory approval, but the FTX estate maintains that fund distribution must follow the court-approved process.

The FTX bankruptcy estate has disputed the recent acquisition of FTX EU by cryptocurrency exchange and wallet firm Backpack. The estate clarified that Backpack was not authorized to distribute funds to former FTX customers or creditors. As we covered in our latest report, the announcement comes after Backpack stated on Monday that it had acquired FTX EU and planned to return funds to affected customers.

FTX’s bankruptcy representatives emphasized that Backpack “has no involvement whatsoever in the U.S. Bankruptcy Court-approved process for returning funds to any FTX customers and other creditors.” The estate also stated that Backpack’s press release regarding the acquisition was made without FTX’s knowledge or approval. Despite Backpack’s assertion that it intends to redistribute customer funds, the FTX estate maintains that the firm lacks the authority to do so.

FTX EU Sale Process and Legal Considerations

In March 2024, the FTX bankruptcy court approved the sale of FTX EU to Patrick Gruhn and Robin Matzke, co-founders of Digital Assets, a firm acquired by Sam Bankman-Fried in 2021. Gruhn and Matzke continued to lead FTX’s European expansion until its collapse.

Backpack later acquired FTX EU from Gruhn and Matzke, a transaction the company claims was completed and recorded in official public records as of June 2024. The acquisition also received approval from CySEC, Cyprus’ financial regulator, in December 2024 following an extensive review process. Backpack asserts that the transfer was conducted legally and that the FTX estate must transfer the shares following the court-approved sales and purchase agreement.

Backpack maintains that, as the new owner of FTX EU, it is responsible for redistributing funds to former customers, reported CNF. The company has also announced plans to rebrand FTX EU as Backpack EU and operate a regulated crypto derivatives service under its acquired licenses.

Ongoing Uncertainty Over Customer Fund Distributions

Despite regulatory approval from CySEC, the FTX bankruptcy estate remains firm in its stance that Backpack has no role in the official fund distribution process approved by the U.S. Bankruptcy Court. The estate reiterated that distributions to former FTX customers or creditors must go through the established legal framework.

Patrick Gruhn, the former head of FTX EU, noted that he initiated a change of control proceeding for FTX EU with CySEC in May 2024, a necessary step for transferring shares of the regulated investment firm. He suggested that FTX’s latest statement was intended to clarify that the U.S. bankruptcy estate has no direct affiliation with Backpack and will not be involved in fund distributions through the company, reported CNF. However, Gruhn confirmed that FTX EU, under its new name, Backpack EU, will proceed with returning customer funds.

The situation remains complex, with legal and regulatory considerations still unfolding. Former FTX EU customers and creditors await further clarity on how and when they will receive their funds as the dispute between Backpack and the FTX bankruptcy estate continues.