Are Ex-FTX Execs Now Building A New Crypto Exchange?

• Ex-FTX lawyers Can Sun, Claire Zhang and ex-FTX employee Armani Ferrante are teaming up to form a new exchange in Dubai.
• Sun has partnered with Dubai-based startup Trek Labs and is expected to offer cryptocurrency services in the region in late October.
• FTX founder Sam Bankman-Fried was indicted for transferring $9 billion in customer funds through Alameda Research for investment purposes.

Post the FTX crypto exchange crash, former executives are now teaming up to form a new cryptocurrency exchange in Dubai. The FTX exchanges’ crash had left many losing millions, eventually resulting in the arrest of its founder, Sam Bankman-Fried.

But now former execs are teaming up to correct the mistakes the FTX exchange made during its period to deliver a better product to its customers. The team has vowed that one of its priorities while launching a new exchange would be to ensure customer funds are safe and secure.

A power-packed team

Now, after a year since FTX became bankrupt, ex-FTX lawyer Can Sun has partnered with Trek Labs, a Dubai-based startup which obtained permission to offer cryptocurrency services in the region in late October. The new exchange is expected to be called the Backpack Exchange, forming a new entity with which Trek Labs will offer those services.

Sun will receive support from ex-FTX employee Armani Ferrante, who will take over as the CEO of Trek’s holding company, which is based. Ferrante also runs Backpack, a cryptocurrency wallet – one which is integrated into Backpack Exchange.

https://x.com/xNFT_Backpack/status/1723184688528032101?s=20

Another legal deputy at FTX, Claire Zhang, will join the power-packed team and serve as one of the executive members. Zhang, also Ferrante’s wife, plans to transition out of the company as she has been working without pay to “help bootstrap the exchange.

Multiparty Computation (MPC) Technique To Ensure Funds Remain Secure

Sun and Ferrante knew firsthand the fallacies that precipitated FTX’s failure to protect customer funds. To fill this breach, Backpack’s technology has integrated a self-custody solution which envisages a multiparty computation (MPC) technique to ensure funds remain secure. In a nutshell, the process involves several parties approving a transaction before funds are moved. This will enable Backpack customers to verify funds whenever they want.

The FTX collapse has led to erosion in customer faith and the need for transparency. Backpack Exchange seeks to fill this breach and is presently in a beta launch, and a broader launch is expected later this month.

Sun also stood as a witness in Bankman-Fried’s recent fraud trial, and Sung also revealed that Bankman-Fried was seeking a legal escape from the charges of why funds from FTX were siphoned off to Alameda Research. Sun had quit FTX when he was told that funds from FTX, which was the customer’s money, were transferred to Alameda Bankman-Fried, who has been convicted on all seven charges of embezzlement and fraud.

Bankman-Fried was indicted for transferring $9 billion in customer funds through Alameda Research for investment purposes. The US Attorney’s office in the Southern District of New York dubbed the fraud the most significant financial fraud in American history. Sam Bankman was found guilty of the charges of conspiracy to commit money laundering and wire fraud and can get a maximum sentence of twenty years in prison.

Other charges, which include commodities fraud and conspiracy to commit securities fraud, also carry hefty sentences, and Sam could stay in prison for the rest of his life. Bankman-Fried is set to be sentenced by Judge Lewis Kaplan on March 28, 2024.

Conclusion

The ex-execs now joining forces send a good signal, but even they would know they have a challenge ahead. To make their way into the heart of investors would be perhaps the most significant challenge they would face to ensure the funds are safe and secure.