Can Sun, former general counsel of FTX, is spearheading the creation of a new exchange, Backpack, along with other ex-FTX executives.

This development is especially noteworthy in the context of the upcoming Benzinga's Future of Digital Assets conference on Nov. 14, where the future of cryptocurrency exchanges will be a key discussion point.

Trek Labs And Backpack Exchange: A New Venture

Trek Labs, based in Dubai and led by Sun, recently received a license from the emirate's crypto regulator, The Wall Street Journal reported.

Armani Ferrante, another former FTX employee, serves as the CEO of Trek's holding company in the British Virgin Islands and operates Backpack, specializing in digital currency wallets.

Trek aims to sell a 10% stake to investors, valuing the venture at over $100 million.

Innovations In User Fund Security

Backpack Exchange, under Trek Labs, plans to incorporate technology from Backpack to enable "self-custody" crypto wallets.

These wallets, designed using multiparty computation techniques, prevent unilateral access by the exchange, allowing users to verify their holdings at any time.

The exchange is expected to launch in beta later this month.

Overcoming FTX’s Shadow

Despite their history with FTX, Sun and Ferrante are focused on establishing trust and transparency in their new venture.

"In a post-FTX world, you need trust and transparency to create a true alternative to the other players," said Sun. The pair have also hired other former FTX legal and compliance employees for their expertise.

FTX Fallout And Legal Cooperation

At FTX, customer and company funds were commingled, leading to approximately $9 billion in missing customer deposits.

Sun testified against FTX founder Sam Bankman-Fried, revealing that Bankman-Fried had misrepresented the protection of customer funds.

Sun, who resigned from FTX after refusing to justify the misappropriation of funds, later cooperated with federal prosecutors, leading to Bankman-Fried's conviction.

Ferrante’s Journey And Future Plans

Ferrante, having witnessed FTX's downfall and having lost significant investments in the collapse, holds a minority share in Trek's holding company.

The team includes Claire Zhang, Sun's former deputy and Ferrante’s wife, who plans to transition out of Trek after an investment round.

This initiative by Sun and his team to launch Backpack Exchange marks a bold step in reshaping trust and security standards in the cryptocurrency exchange industry, learning from the failures of their previous employer.

Their efforts signify a crucial turning point in the crypto world, addressing vital concerns about transparency and user protection in digital asset trading.

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