Several former FTX executives have come together to help build a new cryptocurrency exchange in Dubai with a specific focus on what FTX failed to do: protect customer funds.
Former FTX Lawyer Can Sun Leads the Way with Trek Labs, a Dubai-Based Startup who received a license to offer cryptocurrency services in the region at the end of October. Backpack Exchange is the name under which Trek Labs will offer these services.
Sun will receive support from former FTX employee Armani Ferrante, who serves as CEO of Trek's holding company in the British Virgin Islands. according according to a Nov. 11 Wall Street Journal report. Ferrante also runs Backpack, a cryptocurrency wallet integrated into Backpack Exchange.
Sun's former legal assistant at FTX, Claire Zhang, who is also Ferrante's wife, is also on Trek's executive team. However, once Trek raises an investment round, Zhang plans to exit the company, as she has been working without pay to "help drive the exchange," WSJ said.
Sun and Ferrante insisted they wanted to use lessons learned from the FTX failure to protect customer funds. Backpack's technology offers a self-custody solution that integrates a multi-party computing (MPC) technique to ensure funds remain secure. MPC typically involves multiple parties approving a transaction before funds are transferred.
As things heat up, keep in mind that phishing attacks are on the rise.
Backpack will NEVER ask you for your private keys.
The only valid website URLs are in our bio. Assume anything else is a scam.
Stay safe.
- Backpack (@xNFT_Backpack) November 11, 2023
It will also allow Backpack customers to verify funds whenever they want, Sun told the WSJ:
"In a post-FTX world, trust and transparency are needed to create a true alternative to other players."
Backpack Exchange is currently in beta with a broader launch coming later this month, the firm said.
Sun was a witness in the recent Bankman-Fried fraud trial, where he revealed that the former FTX CEO turned to him for legal justification for why FTX funds were in Alameda Research. Bankman-Fried was convicted on all seven charges related to fraud.
Related: How long could Sam Bankman-Fried be in prison? Crypto Lawyers Weigh In
Sun said he resigned as FTX general counsel the day after Bankman-Fried informed him about the use of clients' money.
"This went against everything I stood for and what Sam represented for me."
The former Bankman-Fried empire billions of dollars mixed of client funds through Alameda Research for investment purposes. About $9 billion in client funds disappeared.
Magazine: Deposit Risk: What Do Crypto Exchanges Really Do With Your Money?
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