The wallet and CEX founded by a former FTX employee is consolidating Superstate’s opening bell just days after liquidated users reported missing their deposits.
Backpack, a centralized crypto exchange (CEX) and self-custody wallet app founded by former FTX and Alameda employees, has partnered with Robert Leshner’s fintech company Superstate to allow users to trade on-chain versions of securities registered with the U.S. Securities and Exchange Commission (SEC).
According to a press release shared with The Defiant, the partnership will integrate Superstate’s Opening Bell platform into Backpack, allowing eligible non-U.S. users to buy, sell, and margin trade real tokenized stocks (not synthetic substitute stocks, the release states) while retaining the same dividend and voting rights as stocks listed on stock exchanges.
Backpack has not yet revealed which tokenized shares will be available at launch, saying more details will be announced in the coming weeks.
As The Defiant previously reported, the broader market for tokenized stocks remains largely dominated by synthetic issuers such as fintech giant Robinhood and US CEX Kraken. Animoca Brands estimates that Kraken’s tokenized equity offering partners, Backed Finance and Ondo Finance, represent 95% of the tokenized equity market, primarily through Ethereum-based synthetic products tied to major U.S. tech stocks and ETFs.
However, Superstate says it will take a different approach by issuing tokens that represent shares in real companies, rather than synthetic versions that simply track prices. As of last month, these included shares in crypto giant Galaxy and Joseph Rubin’s Sharplink.
History of backpack FTX cooperation
Backpack Exchange is currently ranked 36th among the largest and most trusted CEXs on CoinGecko, with just under $120 million in trading volume over the past 24 hours.
Backpack founder and CEO Armani Ferrante was reportedly an early employee of Alameda Research, a controversial quantitative trading firm with ties to the now-defunct exchange FTX. According to LinkedIn, he co-founded the new exchange and wallet with former FTX General Counsel Can Sun. Mr. Can Sun is also currently Head of Legal and Compliance at Backpack.
The company acquired FTX’s EU-licensed division in January.
KFC voucher, deposit confusion
The launch of the tokenized stock comes amid protracted controversy after the massive flash crash and liquidation of cryptocurrencies on October 10, when more than $19 billion of positions were liquidated across the market.
As prices steadily declined and billions of dollars of positions were wiped out across exchanges, some Backpack users reported that newly deposited funds after being liquidated on CEX were automatically used to cover negative balances and other users’ losses. This means that their funds evaporate as soon as they are deposited.
Ferrante addressed this concern in an Oct. 12 post about X, stressing that the platform will never affect users’ unrealized gains and losses (PnL). He explained that “a small amount” of so-called “bankrupt users” was deposited into the exchange “before” we settled all the exchange’s accounts on behalf of the users. [sic]”
Ferrante reassured users: “All positions were closed completely and without question. We have not and will never touch a single penny of unrealized gains and losses from our users.”
Backpack’s CEO also directed affected users (“users who made deposits during settlement of their accounts, or those who were unexpectedly affected for any reason”) to contact Backpack for assistance, but did not specify that the company would compensate users who lost deposited funds.
Additionally, according to a now-deleted post, what appears to be Backpack’s official Chinese X account offered 200 KFC meal vouchers to users who lost money in the market crash.
However, Ferrante later clarified in another X post that KFC’s post was made by a locally managed X account and did not represent the company’s official position, calling the tweet “fucking retarded.”
The Defiant reached out to Backpack for comment on the liquidation incident, but did not receive a response as of press time.