Backpack Exchange Rebounds After Massive 2022 Capital Loss
The firm recovered from a $14.5 million loss to acquire a European license and expand its global operations.
Updated on Oct. 21, 2026 in Investing
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Backpack lost roughly $14.5 million, or 90% of its operating capital, when the FTX exchange collapsed in November 2022. The firm has since recovered, acquiring the European arm of FTX in January 2025 to expand its regulatory standing.
Why it matters
This history highlights the extreme volatility risks inherent in early-stage crypto ventures and the reliance many startups had on centralized exchanges. The firm's subsequent growth reflects the broader industry shift toward seeking regulated licensing following the collapse of major platforms.
Backpack lost $14.5 million in the 2022 FTX collapse, representing roughly 90% of its capital at the time. By mid-2026, the firm reported cumulative trading volumes exceeding $420 billion across its platform.
The players
Backpack
A digital asset exchange that utilizes independent verification nodes to allow users to verify balances.
FTX
A defunct global cryptocurrency exchange that filed for bankruptcy in 2022.
Armani Ferrante
The founder of Backpack who previously worked at the investment firm Alameda Research.
The details
Backpack's founder, Armani Ferrante, previously worked at Alameda Research, an entity closely tied to FTX. Following the 2022 capital loss, the company secured $17 million in Series A funding in early 2024 to continue operations. In January 2025, the firm purchased the European assets of FTX for $32.7 million, gaining a MiFID II license and assuming responsibility for 110,000 former customer claims.
Timeline
September 2022: FTX Ventures co-led a $20 million funding round for Backpack.
November 2022: Backpack lost 90% of its capital when the FTX exchange collapsed.
2023: Backpack launched its exchange in beta.
Early 2024: The company closed a $17 million Series A funding round.
January 2025: Backpack acquired the assets of FTX Europe for $32.7 million.
Money Landscape
Backpack's acquisition of a MiFID II-licensed entity reflects a broader industry movement to bring digital asset exchanges under traditional financial oversight. This transition marks a departure from the unregulated growth era that preceded the 2022 market volatility.
Investors should note that platform consolidation can lead to changes in terms of service and account security protocols for inherited customer bases. Always verify the regulatory registration of any exchange you use by checking official financial authority databases in your jurisdiction.
The takeaway
Large capital losses during exchange failures underscore the importance of checking if an exchange offers independent proof-of-reserves or third-party audits. Ensure you are aware of your rights when an exchange you use is acquired or changes its legal operating entity.
Further reading
For more on the changing standards in the digital assets market, visit the Investing section.
Source note: This article includes information reported by Crypto Briefing.
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