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Backpack Crypto Exchange: Not Operational Yet, but Already Licensed

The crypto wallet provider announced the launch of a crypto exchange "dedicated to the ideals and principles the industry stands for." It has already secured a license in Dubai.

Backpack crypto exchange

Web3 digital wallet Backpack has announced the launch of a cryptocurrency exchange, which, according to Armani Ferrante, founder and CEO of Backpack, is a true wonder. 

Backpack is a Web3 wallet which was developed by Coral, the team behind Anchor, a framework for one of Solana’s key technologies, and xNFTs, a tokenized code representing ownership rights over its execution or put simply NFTs that can launch applications. Backpack is also is behind the Mad Lads, one of the best-selling NFT collections in the world.

Ferrante wrote an inspiring thread about the launch of an “exchange dedicated to the ideals and principles the industry stands for.” He outlines the importance of a wallet and exchange combination, allowing the platform to be regulated while completely private. According to him, it will be a new type of crypto-native institution devoid of the typical drawbacks, including lack of auditability and unreliable proof of reserves. He claims that users should not tolerate such problems, hinting at the exchange's competitors:

“I’m tired of CEXs selling out the industry – whether it's curly haired criminals advocating for overly abusive DeFi rules while stealing customer deposits, or bag biased executives pretending like subcent transaction fees don't already exist.”
Solana developer platform Coral raises $20M led by FTX, Jump Crypto to  build web3's iPhone | TechCrunch
Armani Ferrante. Source: TechCrunch

These aggressive and quite obvious hints are perhaps no surprise. Ferrante used to work as a software engineer at Alameda Research. Just before the exchange's collapse, he raised $20 million for Coral in a funding round co-led by FTX Ventures, which itself invested a lot in the startup. As a result of the FTX fall, Coral lost $14.5 million that got stuck on the exchange. Even without those funds, Coral has managed to succeed over the past year, but the memory of that setback was perhaps one of the reasons that led to the creation of a proper substitute.

Ferrante specifically mentioned that the team had “worked with global regulators,” and apparently, the cooperation was successful. By the end of October, the Dubai Virtual Assets Regulatory Authority (VARA) had issued an active VASP license to Trek Labs Ltd FZE trading as Backpack Exchange. While other well-known companies like OKX, ByBit, and are still pending VARA approval, a newcomer that is not even operating yet has apparently already received it. The only activity licensed for Backpack at the moment is ‘Exchange Services’.

According to its statement, Backpack is working to secure additional licenses worldwide.

You can find more information about VARA and other exchanges’ attempts to obtain a VASP license in Dubai here

The exchange is expected to move into beta testing this November and will be available to existing Backpack and Mad Lads community members. The public release is scheduled for the first quarter of 2024. The beta will offer only spot crypto trading functionality, but the team will be working on adding “various trading functionalities such as derivatives, margin, cross-collateral.” 

“And we believe in magic. Yes we do,” - says Ferrante about the exchange. Observers is on the waiting list already and will let you know if and when the magic happens.