A group of ex-FTX leaders has joined forces to establish a novel cryptocurrency exchange in Dubai, emphasizing a distinctive commitment to addressing a key FTX shortfall: ensuring customer funds’ security.
Trek Labs, a Dubai-based business granted permission to provide Bitcoin services in the area in late Oct, is being led by former FTX lawyer Can Sun. Trek Labs intends to rebrand those services to backpack exchange.
As the CEO of Trek’s holding company in the British Virgin Islands, Armani Ferrante, a former employee of FTX, will assist Sun, the Wall Street Journal reported on Nov 11. Additionally, Ferrante owns Backpack, a Bitcoin wallet that is a part of Backpack Exchange.
Claire Zhang, Ferrante’s wife and Sun’s former legal deputy at FTX is a Trek executive team member. Zhang, however, intends to leave Trek once it secures an investment round because she has been working for free to “help bootstrap the exchange,” according to the Wall Street Journal.
Trust & Transparency Post-FTX: Backpack Exchange’s MPC Security
Moreover, Sun and Ferrante reiterated their desire to apply the knowledge gained from FTX’s inability to safeguard client money. The self-custody solution provided by Backpack’s technology incorporates a multiparty computation (MPC) technique to guarantee the security of payments. Usually, MPC requires multiple parties to approve a transaction before any money is sent.
It will empower Backpack customers to confirm funds at their convenience, according to Sun’s statement to WSJ: ‘In a post-FTX era, establishing trust and transparency is crucial for developing a genuine alternative to existing players.’ The Backpack Exchange is currently undergoing beta testing, with a broader launch scheduled for later this month, as announced by the company.
During Bankman-Fried’s recent fraud trial, Sun testified as a witness, disclosing that the former FTX CEO approached him for a legal justification regarding FTX’s funds being at Alameda Research. Bankman-Fried was found guilty on all seven fraud-related charges.
Sun stated that he resigned as FTX’s general counsel the day after Bankman-Fried informed him about using customer funds. “This contradicted everything I believed in and what Sam had conveyed to me.”
However, Bankman-Fried’s previous business empire mixed billions of dollars in customer funds through Alameda Research for investment objectives. Customer funds of approximately $9 billion went unaccounted for.
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