Backpack EU begins operations with CySEC-approved derivatives platform
News Summary
Backpack EU, the entity that acquired the former European arm of the defunct FTX exchange (FTX EU), has announced the launch of its perpetual futures platform in Europe after reaching a settlement with the Cyprus Securities and Exchange Commission (CySEC). Registered with CySEC as Trek Labs Europe, Backpack EU confirmed on Monday to Cointelegraph that it is commencing operations. CEO Armani Ferrante stated that the company is fulfilling its promise to refund former FTX EU customers and is now positioned to offer one of Europe's first fully regulated crypto derivatives platforms. The perpetual futures platform operates under a MiFID II license, which CySEC reissued to Trek Labs Europe in June 2025. This reissuance followed Backpack EU's payment of 200,000 euros ($235,000) for “possible violations” of regulations linked to FTX, settling with the regulator.
Background
FTX, a globally prominent cryptocurrency exchange, collapsed in November 2022, causing widespread turmoil in the crypto market. This collapse led to difficulties for several associated entities, including FTX EU. The Cyprus Securities and Exchange Commission (CySEC) suspended FTX EU's Cyprus investment firm (CIF) license in November 2022, following the collapse of its global parent, FTX. Backpack acquired FTX EU in early 2025 and took responsibility for distributing FTX EU customer claims starting from May 2025. MiFID II (Markets in Financial Instruments Directive II) is a cornerstone EU regulation designed to enhance transparency, efficiency, and security in financial markets.
In-Depth AI Insights
What does Backpack EU's successful relaunch of FTX EU's operations under new ownership signify for regulatory clarity and market trust in the European crypto derivatives space? - Backpack EU's re-issuance of the MiFID II license by CySEC, after fulfilling customer refunds and paying a settlement, signals a pragmatic and maturing approach by European regulators towards crypto derivatives. - Regulators are balancing investor protection and market integrity with fostering innovation. This approach could set a precedent for other crypto firms seeking compliant operations in Europe, encouraging greater institutional participation. - The emphasis on customer protection and compliance helps rebuild market trust, which was severely damaged by the FTX collapse, thereby attracting a broader base of institutional and retail investors. How might Backpack EU's entry with a fully regulated derivatives platform impact the competitive dynamics among crypto exchanges operating in Europe, particularly those currently unregulated or seeking licenses? - As a MiFID II licensed derivatives platform, Backpack EU will gain a significant competitive advantage, especially in attracting institutional clients and investors seeking regulatory certainty. - This will exert considerable pressure on platforms operating in Europe without full MiFID II or equivalent regulatory approval, compelling them to accelerate their compliance efforts or risk losing market share. - The European crypto market could see an accelerated bifurcation, favoring compliant platforms which gain market share and trust, while non-compliant ones face marginalization, contributing to the market's long-term health. What are the broader implications of MiFID II authorization for crypto derivatives in Europe, and could this set a precedent for future global regulatory frameworks? - The application of the MiFID II framework demonstrates that traditional financial instrument regulatory principles can be effectively applied to crypto derivatives. This provides valuable practical experience and a bridge to the upcoming EU Markets in Crypto-Assets (MiCA) regulation. - This approach of integrating crypto derivatives into existing financial regulatory frameworks could serve as a reference model for other jurisdictions developing their own crypto regulatory policies, particularly concerning investor protection, market manipulation, and transparency. - However, the MiFID II framework was not custom-built for the crypto market, and its applicability may still require continuous refinement and adjustment in practice to better suit the unique characteristics of crypto assets. The forthcoming MiCA regulation will be crucial for observing the direction of crypto regulation in Europe and globally.