Written by: Luke, Mars Finance
In the long shadow of the collapse of the FTX empire, millions of creditors worldwide are still anxiously awaiting the final judgment. However, for users in specific jurisdictions, such as mainland China, the glimmer of hope seems to be swallowed by a legal document. The FTX estate proposed to the court to designate 49 countries and regions, including China and Russia, as 'restricted jurisdictions' to avoid local legal risks, which may exclude users in these areas from compensation distribution, leaving them in a desperate situation of losing everything.
In this 'no man's land' of law and finance, an unexpected name has emerged: Backpack Exchange. This young platform, founded by former FTX executives and itself a victim of the FTX collapse, is rumored to be launching a dedicated bond market to support the claims of users from mainland China and other regions who have been 'abandoned' by the official liquidation process.
This dramatic scene raises deep questions: why would a team reborn from the ruins of FTX choose to step forward and touch this hot potato that even the FTX liquidators fear to avoid? Is this merely a matter of moral assistance, or is it a carefully considered strategic layout? The answer may be far more complex than it appears. Backpack's actions are not only a redemption of the past but also a clever reconstruction of the trust foundation for the future of the crypto industry. It is rooted in the founding team's unique 'original sin' and sense of mission, leveraging its verified technical strength and profound insight into the essence of the trust crisis in the post-FTX era, with the intention of transforming FTX's greatest failure into its most unique success narrative.
Original Sin and Redemption
Backpack's choice is deeply rooted in the intertwined history between its founding team and FTX. Its core members almost all bear the deep imprint of FTX/Alameda: Founder and CEO Armani Ferrante was a software engineer at Alameda Research and is also the creator of the core development framework Anchor in the Solana ecosystem; Co-founder Tristan Yver was the strategic head at FTX US; and the company's legal head Can Sun was previously the chief legal counsel of FTX. They have an unparalleled firsthand experience of the internal operations and fatal flaws of that once-glorious crypto empire.
However, defining them as 'former members of FTX' is far from the full story. More critically, they are also direct victims of that disaster. In September 2022, Backpack's predecessor Coral completed a strategic financing round of $20 million led by FTX Ventures and Jump Crypto. Just two months later, the collapse of FTX caused over 80% of the operational funds deposited in the exchange to evaporate instantly. Armani Ferrante later described the situation in an interview: 'It felt like being knocked out in a boxing ring, needing urgent rescue to survive.'
This nearly fatal blow did not lead them to sink; instead, it forged Backpack's unique 'post-FTX' mission. From the very beginning, they committed to building an exchange capable of fundamentally addressing the trust and transparency issues that led to FTX's demise. Ferrante has repeatedly stated publicly: 'In the post-FTX era, you need trust and transparency to become a true alternative to other players.' He reflected: 'People praised the speed of FTX's development... but it turns out they were so fast because they took every shortcut in the book.' Therefore, Backpack emphasized technical verifiability from the outset, ensuring that every state transition is signed by key pairs, and the entire ledger snapshot is available for review at any time, using technical means to eliminate the possibility of opaque operations. This mission, born from deep pain, endows Backpack with a narrative authenticity that is hard to replicate. When they talk about trust, behind it lies tens of millions of dollars in real losses; when they advocate for other FTX victims, it is not just a business act but also a perfect closure of their own redemption story.
A 'Great Wall' of claims
As the Backpack team rebuilds from the ruins, a large number of FTX Chinese users find themselves facing an insurmountable legal barrier. The FTX estate submitted a motion to the bankruptcy court in Delaware, planning to designate 49 jurisdictions as 'potential restricted areas' in the name of complying with various national regulations, claiming that distributing assets to these areas 'could trigger fines and penalties, including personal liability for directors and executives, and/or criminal penalties including imprisonment.'
The scope and amount affected by this move is astonishing. According to calculations by The Block based on court documents, the total amount of claims involved in these 49 'restricted jurisdictions' is approximately $800 million. Among them, creditors from mainland China account for an astonishing 82%, involving about $656 million. This means that a large, legitimate creditor group may be deprived of their right to compensation simply because of their geographical location.
Faced with this systemic exclusion, Chinese creditors have not sat idly by. A creditor named Weiwei Ji represented over 300 Chinese users in submitting a formal objection to the court. In the document, he lamented: 'My family holds four KYC-verified FTX accounts, with a total claim amount exceeding 15 million dollars... We fully complied with every procedural requirement under the plan. Yet this motion threatens our right to receive distribution in an arbitrary and unfair manner.'
Their legal arguments hit the nail on the head: first, this geographic exclusion constitutes 'unfair discrimination' and directly violates the core principles of U.S. bankruptcy law. Secondly, the FTX estate failed to provide any legal basis for the rationale of such geographic discrimination. Furthermore, creditors emphasized that compensation is denominated and settled in U.S. dollars, not cryptocurrency, which can be legally distributed to Chinese citizens through mature financial channels such as Hong Kong—just as successfully practiced in the Celsius bankruptcy case. Additionally, while Chinese law prohibits cryptocurrency trading, it recognizes its legitimacy as personal property, rendering the liquidation party's so-called 'legal risks' untenable.
The FTX estate's extreme conservative hedging strategy, though seen as 'cautious' by traditional legal practitioners, inadvertently created a vast market vacuum. They simplified a complex global issue into a localized solution centered around U.S. legal liability, pushing hundreds of millions of dollars of legitimate claims to the edge of a cliff. It is precisely this 'malfunction' of the official process that has opened an excellent opportunity for more agile entities like Backpack, which possess a more crypto-native mindset.
The 'rehearsal' in Europe
Before reaching out to a broader and more complex market, Backpack has already completed a critical 'live drill' in a highly regulated environment. In early 2025, Backpack announced the successful acquisition of FTX EU and received approval from the Cyprus Securities and Exchange Commission (CySEC). Although this acquisition initially sparked a public dispute with the FTX estate, which claimed to be unaware of it, Backpack quickly clarified that they had legally acquired these assets from former insiders of FTX who had received bankruptcy court approval. This series of operations fully demonstrated Backpack's superb skills in complex cross-border mergers and regulatory communication.
More importantly, Backpack has established a clear and feasible claims process for users of FTX EU. Users only need to register on the Backpack EU platform using their original FTX email, complete KYC verification, and they can associate their old accounts and wait for fund distribution. The entire process is settled in euros, and funds are now available for withdrawal. Armani Ferrante's comments highlight the core idea: 'Client compensation is a key step in rebuilding industry trust and confidence, and Backpack is committed to returning FTX EU users' funds in the fastest and safest way possible.'
The claims process of FTX EU is far more than an independent business project; it is essentially a public 'beta test' by Backpack to address the broader issue of FTX creditors. By successfully executing this process, Backpack not only accumulated valuable experience in handling cross-border bankruptcy claims and established a compliance framework and technical infrastructure, but also sent a strong signal to the entire market, especially to the forgotten Chinese creditors: Backpack's commitment is not empty talk, but is based on verified and executable capabilities. This 'report card' from Europe has become the most credible resume for their entry into a wider market.
Strategic Machination: Why This Is Far More Than Just a Good Deed?
Connecting all the dots, a clear strategic picture emerges. Backpack's support for Chinese creditors is a perfect combination of its core mission, blue ocean strategy, and growth ambition.
First and foremost, this is the ultimate practice of its 'post-FTX' redemption mission. By helping those most helpless victims abandoned by the official process, Backpack directly fulfills its founding promise of 'building a truly trustworthy exchange.'
Secondly, this represents a textbook blue ocean strategy. While giants like Coinbase and Binance fiercely compete in the 'red ocean' fields of transaction fees and listing speeds, Backpack carved out a different path, shifting the dimension of competition to 'trust' and 'solving historical issues.' This market, composed of hundreds of millions of dollars in claims and tens of thousands of anxious users, is a completely uncompetitive blue ocean. By intervening, Backpack not only gains a moral high ground but also establishes a unique brand moat.
Finally, and most critically, the business logic lies in the immense potential for user growth behind it. Unlike traditional customer acquisition methods like airdrops and rebates, Backpack aims to directly convert hundreds of thousands of KYC-verified, high-net-worth crypto users into loyal customers without any cost by addressing a pain point worth over $650 million. These users, having been 'rescued' by Backpack after experiencing despair, will have brand loyalty far beyond ordinary marketing activities. This innovative approach elevates 'customer support' and 'crisis public relations' to the level of top growth strategies, building trust through concrete actions and exchanging trust for users.
A New Paradigm of Trust in the Post-FTX Era
As the long liquidation saga of FTX gradually comes to an end, the most captivating chapter may not be written in the court documents of Delaware, but is quietly unfolding on Backpack's servers. Backpack plans to provide support for FTX creditors in China and other 'restricted areas,' a move that profoundly reveals the ingenuity of its business logic: it arises from the founding team's deep pain, seizes the vast market gap left by the official liquidation process, and ultimately points to a grand strategic goal—rebuilding trust from the rubble.
This is not merely a charitable act but a grand strategy to convert the industry's greatest disaster into its strongest competitive advantage. It heralds a potential shift in the competitive paradigm of the crypto world: future exchanges may no longer just compete on technology and functionality, but also on their ability to solve historical problems, take industry responsibility, and thus build truly solid trust relationships. Backpack is betting that in the post-FTX era, the scarcest and most valuable asset is not code, not liquidity, but that verifiable, perceivable, and trustworthy trust. This concerns not only the recovery of funds but also the reshaping of confidence across the entire industry.
