Backpack Launches Cryptocurrency Exchange After Securing License from VARA
Web3 digital wallet company Backpack has obtained a key license from the Dubai Virtual Assets Regulatory Authority (VARA) and announced the launch of its cryptocurrency exchange. The new exchange will be regulated as a Virtual Asset Service Provider (VASP) by VARA. Backpack stated that its exchange incorporates innovative features such as zero-knowledge proof of reserves (zk-proofs), Multi-Party Computation (MPC) for custody, and low latency order execution.
Dubai’s Regulatory Authority for Virtual Assets
VARA is responsible for regulating all virtual asset activities in Dubai. This license acquisition marks an important step for Backpack as it ensures compliance and regulatory oversight for its operations.
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Founder’s Motivation
Backpack’s CEO and founder, Armani Ferrante, faced challenging circumstances when Coral, the crypto infrastructure company behind Backpack, collapsed. Coral lost $14.5 million, including the $10 million investment from FTX Ventures. Inspired by this experience, Ferrante aims to create a transparent and secure exchange that addresses the flaws of traditional crypto exchanges.
Beta Launch and Future Plans
The Backpack Exchange will enter beta testing in November 2023 before launching to the public in Q1 2024. The company plans to add various trading functionalities, including derivatives, margin trading, and cross-collateralization. The compliance team at Backpack has professional experience with industry leaders such as Barclays, State Street, HSBC, and Coinbase.
Hot Take: A Transparent and Secure Crypto Exchange
Backpack’s launch of its cryptocurrency exchange is a significant development in the crypto industry. By incorporating advanced features like zk-proofs and MPC, the exchange aims to provide transparency, security, and auditability. With its emphasis on regulatory compliance and professional expertise, Backpack has the potential to set a new standard for crypto exchanges and address the issues that have plagued the industry.
