Former FTX executives, some of whom testified against Sam Bankman-Fried, have joined forces to create a new cryptocurrency exchange called Trek Labs. This Dubai-based startup, led by former FTX general counsel Can Sun, recently obtained a license from the Dubai Virtual Assets Regulatory Authority (VARA) crypto regulator.
Armani Ferrante, a former FTX employee, is the CEO of Trek Labs’ holding company in the British Virgin Islands. Additionally, Ferrante is involved with a partner firm called Backpack, which specializes in designing and operating digital currency wallets. Sun’s former legal deputy, Claire Zhang, also holds a position on Trek’s executive team.
Trek Labs’ goal is to address the issues that led to the challenges faced by their previous employer. Sun and Ferrante aim to apply lessons from FTX’s challenges to enhance user fund security. The venture seeks to sell a 10 percent stake to investors, valuing the company at over $100 million.
Trek Labs operates under the name Backpack Exchange. Using Backpack’s technology, the exchange allows users to store funds in their own “self-custody” crypto wallets, preventing the exchange from unilaterally accessing them. It is also created using multiparty computation techniques, meaning that transactions need approval from multiple parties. Set for a beta launch this month, the exchange allows customers to verify their holdings anytime.
“In a post-FTX world, you need trust and transparency to create a true alternative to the other players,” Sun said.
Sun explained that he and Ferrante had recruited additional former FTX legal and compliance staff to Trek Labs based on their expertise. Sun informed VARA about his prior role at FTX in regulatory filings and investor materials. He also told VARA about his testimony against Bankman-Fried.
Ferrante has a minority stake in Trek’s holding company, as per corporate documents. In a May submission to Dubai’s regulator, Trek disclosed Zhang’s marriage to Ferrante. Zhang expressed her intention to step back from the company once Trek secures an investment round. She has been working without pay to support the exchange’s initial stages.
At FTX, Bankman-Fried mixed customer and company funds, secretly channeling money to his trading firm, Alameda Research, using hidden software access. Clients only discovered this when a crisis at FTX revealed that their funds had been gone. Approximately $9 billion of customer deposits on FTX became unaccounted for.
“This went against everything that I stood for and was represented to me by Sam,” Sun said during the trial. Sun informed the jurors that Bankman-Fried had consistently assured him that customer funds had been segregated and safeguarded.
During FTX’s crisis, Bankman-Fried approached Sun to help secure emergency funds from investors and requested legal justifications for why FTX funds were with Alameda. Sun declined, and the day after Bankman-Fried disclosed the use of customer funds, Sun resigned from his position as FTX’s general counsel.
Later, Sun entered a nonprosecution agreement with federal prosecutors and cooperated in the investigation, resulting in Bankman-Fried’s recent conviction.
During his testimony on October 19, Sun explained that he had sought the nonprosecution agreement as a precaution. In his role as general counsel, he had been part of transactions that, unbeknownst to him at the time, might have included misused client funds.
On the other hand, Ferrante worked at Alameda for a few months in 2018 and then joined FTX for a crypto token project. His digital currency wallet company Anchor completed a $20 million investment round in September 2022, with FTX’s venture arm contributing half of the total amount. Ferrante stored most of the raised funds on the FTX platform and said that he had lost everything with the exchange’s collapse.
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