A group of former FTX executives has come together to establish a new cryptocurrency exchange in Dubai, aiming to address a critical issue that plagued their previous employer—securing customer funds.
Leading this initiative is Can Sun, a former FTX lawyer, who heads up Trek Labs, a startup based in Dubai.
Trek Labs secured a license in late October to provide cryptocurrency services in the region, operating under the name “Backpack Exchange.”
Supporting Can Sun is Armani Ferrante, an ex-FTX employee who serves as the CEO of Trek’s holding company located in the British Virgin Islands.
Ferrante also oversees Backpack, a cryptocurrency wallet integrated into the Backpack Exchange platform.
Claire Zhang, Sun’s former legal deputy at FTX (and Ferrante’s wife), also holds a position on Trek’s executive team.
However, once the company completes an investment round, Zhang plans to step away, having contributed her efforts pro bono to help bootstrap the exchange.
The key focus of Trek Labs and Backpack Exchange is to prevent the types of issues related to customer fund security that plagued FTX in the past.
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Backpack’s technology offers a self-custody solution, utilizing multiparty computation (MPC) techniques to ensure the utmost security for users’ funds.
MPC involves multiple parties approving a transaction before any funds are moved, enhancing security.
In addition to enhanced security measures, Backpack Exchange aims to provide transparency and trust to its customers, which the founders believe is essential in the post-FTX landscape.
Users will have the ability to verify their funds at any time.
Currently, Backpack Exchange is in beta testing, with a broader launch scheduled for later this month.
Can Sun made headlines as a witness in the recent fraud trial of Sam Bankman-Fried, the former CEO of FTX. Sun revealed that Bankman-Fried had sought legal justification from him for the use of FTX’s funds by Alameda Research.
Bankman-Fried was subsequently convicted on all seven fraud-related charges.
Sun’s decision to depart from his role as FTX’s general counsel came after Bankman-Fried disclosed the use of customer funds for purposes that contradicted Sun’s principles and understanding of the company’s operations.
Bankman-Fried’s actions resulted in the commingling of billions of dollars of customer funds through Alameda Research, leading to the disappearance of approximately $9 billion in customer funds.
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