Backpack, a web3 digital wallet company, has disclosed that it will be launching a cryptocurrency exchange soon.
The company has secured a crucial license from the Dubai Virtual Assets Regulatory Authority (VARA) and has announced that the exchange will be regulated.
VARA has issued the company with a Virtual Asset Service Provider (VASP) license, and the exchange will be launched under its umbrella. Backpack was founded by Coral, a crypto infrastructure company.
“Backpack Exchange has developed a next-generation exchange that incorporates a novel zero-knowledge proof of reserves, or zk-proofs, Multi-Party Computation, or MPC, for custody, and low latency order execution,” the company said.
According to the statement, VARA is responsible for regulating all virtual asset activities across the Emirate of Dubai. Armani Ferrante, the CEO and founder of Backpack, faced some challenging circumstances during the last year.
He had raised $20 million for Coral in a round co-led by FTX Ventures just weeks before the exchange collapsed.
As a result of FTX’s demise, Ferrante was forced to scramble after Coral lost $14.5 million that was stuck on the exchange, including the $10 million that FTX Ventures had invested in the startup.
Ferrante’s decision to start his own exchange appears to be partly motivated by the calamity caused by FTX’s downfall.
“It’s time to put an end to the days of opaque crypto exchanges representing everything our industry stands against,” he said in a statement. “It shouldn’t be normal to use an exchange with a single point of failure, without proof of reserves, or without auditability.”
According to the latest reports coming from the online publication The Block, the new exchange is slated to begin in beta in November before going live for the general public in the first quarter of 2024, Backpack said in its statement.
“The Backpack Exchange team will be working to add in various trading functionalities such as derivatives, margin [and] cross-collateral,” the company also said, adding that its compliance team has professional experience with Barclays, State Street, HSBC, and Coinbase.
