We reported on Tuesday that Backpack purchased FTX in a deal worth $32,7 million. The following day, FTX released a clarification of Backpack’s statement. Backpack responded to FTX in a subsequent press release.
I think this is what companies do to fight each other.
This is the core of the matter: The FTX that remains said they were unaware of the fact Backpack purchased FTX. They also swore to not be responsible for any repayments made by FTX’s EU customers, and claimed that it could not verify the truth of what Backpack claims. Backpack said that the saga surrounding its FTX EU purchase had been widely reported and they would rename FTX EU as Backpack EU prior to settling customer claims.
Dueling press releases may be a result of the bad feelings FTX has towards FTX EU. FTX tried to recoup some of $323 Million Sam Bankman Fried spent on the company by suing its European arm. The settlement was that the original founders of FTX EU, Robin Matzke & Patrick Gruhn, bought back FTX EU at a price of $32.7 million. Backpack purchased FTX EU, which was owned by Gruhn and Matzke. Ownership shares have not yet been transferred.
Backpack didn’t explain the entire sequence of events when it released its press release. However, this doesn’t change anything materially. Backpack is the owner of FTX EU, whether it was purchased by Backpack from FTX itself or the individuals who acquired the asset from FTX.
The sale is still a little strange, to me at least. Backpack said it acquired FTX in April of 2024, for a total price of $32,7 million. Just a few months earlier, FTX EU founders had bought back the company for this exact price in a settlement of a legal suit. FTX reportedly decided that “no other buyer would agree to purchase” FTX EU.
It doesn’t seem very business savvy for Backpack to pay the full $32.7 million for an exchange that no one else apparently wanted — and which was sold in a court settlement. Why not ask for some money off to take it from Gruhn and Matzke? Backpack is also paying a lot for a small startup. The company lost a significant amount of funding when FTX failed, and only raised $17m in its latest funding round. It’s a big amount for a startup like Backpack to pay. The project lost reportedly a lot of its funding in the FTX collapse, and it only raised $17 million during its last round of financing. Backpack has not responded to my question about the financial aspect of the deal.
In any case, FTX appears to be nitpicking Backpack’s press release. The broad strokes don’t seem to merit much doubt. It’s FTX, after all. So it’s not surprising that things didn’t work out as expected.
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