Backpack Launches Regulated Cryptocurrency Exchange on Solana
Backpack, a Solana-based NFT wallet app, has announced the upcoming launch of its regulated cryptocurrency exchange called Backpack Exchange. The exchange has obtained a Virtual Asset Service Provider license for Exchange Services from the Dubai Virtual Assets Regulatory Authority (VARA).
The VARA spokesperson stated that the license was granted after a thorough evaluation process and praised Backpack Exchange for its commitment to investor protection and risk assurance.
Coral’s Involvement and Features of Backpack Exchange
Coral, the company behind the Backpack app, is responsible for developing the Solana-based xNFT standard and the popular Mad Labs profile picture (PFP) collection on Solana. The development of Backpack Exchange has been underway for five months and incorporates technologies such as zero-knowledge proof of reserves and multi-party computation (MPC). It is important to note that the VARA license only covers Backpack Exchange and not other services within the Backpack app.
Transparency and Compliance as Priorities
Backpack founder and CEO Armani Ferrante emphasized the importance of transparency and compliance in exchanges. Ferrante aims to raise the bar by implementing features such as proof of reserves and auditability to showcase the best aspects of this technology. Trust verification is crucial in ensuring a secure trading environment.
Lessons from FTX Experience
Coral’s decision to prioritize transparency comes from their past experience with collapsed crypto exchange FTX. When FTX shut down in November 2022, Coral had $14.5 million in investment funding held on the platform, including $10 million from FTX Ventures. Unfortunately, this amount remains inaccessible to the founders.
Launch Details and Future Expansion
Backpack Exchange will initially launch in private beta for members of Coral’s existing Backpack and Mad Lads communities in November. The exchange plans to open to the general public in Q1 2024. Initially, the exchange will offer spot trading of cryptocurrencies and aims to expand into derivatives, margin trading, and other features as it acquires additional licenses globally.
Hot Take: Backpack Exchange Raises the Bar for Transparency and Compliance
Backpack’s upcoming regulated cryptocurrency exchange on Solana, Backpack Exchange, sets a new standard for transparency and compliance in the crypto industry. With its Virtual Asset Service Provider license from VARA, the exchange prioritizes investor protection and risk assurance. By incorporating technologies like zero-knowledge proof of reserves and multi-party computation (MPC), Backpack Exchange aims to provide a secure trading environment. The founders’ commitment to trust verification stems from their unfortunate experience with FTX’s collapse, highlighting the need for reliable exchanges. Launching initially in private beta and expanding to the public in 2024, Backpack Exchange plans to offer a wide range of trading services while obtaining additional licenses globally.
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