FTX Slams Backpack’s Misleading FTX EU Fund Distribution Claims

FTX came out strong against Backpack’s takeover of FTX EU and how it said funds would be given to FTX EU customers. This happened because Backpack made claims that worried former FTX EU customers. FTX also revealed that Backpack’s announcement wasn’t approved and had several misleading statements.

The United States Bankruptcy Court for the District of Delaware didn’t okay Backpack’s acquisition of FTX EU, FTX explained. Before this, FTX had agreed to sell FTX EU to certain former insiders of FTX Europe as part of a settlement approved by the U.S. Bankruptcy Court. FTX has now found out that these insiders made a deal to transfer FTX EU to Backpack.

Backpack Can’t Distribute Funds

Even though Backpack said it could, FTX said that Backpack can’t distribute funds to any customers or creditors, including those from FTX EU. FTX EU itself is responsible for repaying FTX EU customers, not Backpack. FTX made it clear that Backpack isn’t involved in the process for returning funds.

FTX also clarified that FTX EU will handle the repayment of funds on its own. The amounts to be repaid and the exact process are up to FTX EU, not FTX, and any repayment will be determined once the sale of FTX EU is completed.

FTX: Backpack’s Claims Are Wrong

FTX said that it didn’t look at or approve Backpack’s website and any messages about asset recovery for former FTX EU customers.

Read also: FTX Repayment Plan Fact Check: Addressing Misinformation

FTX said it’s not responsible for anything Backpack says, including any statements made in their press release or on their website. FTX’s statement stressed that Backpack’s announcements weren’t approved and had many inaccuracies.

FTX’s Plan to Repay Customers

This comes after FTX recently laid out its plans to repay customer funds within 60 days of the effective date. It could reach between $14.7 billion and $16.5 billion, but the first round of payments will go to smaller claims of $50K or less.

They said that customers will receive approximately 119% of their claims, including principal and interest. However, creditors with larger claims will have to wait longer for their distributions. BitGo and Kraken will manage the distribution process and will handle payouts in supported jurisdictions.