Backpack, a prominent player in the world of Web3 wallets, has made a significant stride into the cryptocurrency industry with the launch of its regulated cryptocurrency exchange Trek Labs Ltd FZE, which will launch under the name Backpack Exchange. This move comes after the Dubai Virtual Assets Regulatory Authority (VARA) granted them the Virtual Asset Service Provider (VASP) license for Exchange Services. This licensing, a first of its kind in the world, signifies a major step forward for both Backpack and the cryptocurrency industry.
Enabling Transparent and Secure Crypto Trading
Backpack, known for its all-in-one Web3 wallet and its highly successful NFT collection, Mad Lads, on the Solana blockchain, has been actively working on the development of Backpack Exchange over the past five months. This new exchange introduces cutting-edge technology into the cryptocurrency space, including zero-knowledge proof of reserves (zk-proofs), Multi-Party Computation (MPC) for custody, and low-latency order execution. These features are aimed at enhancing security, transparency, and efficiency in cryptocurrency trading.
Armani Ferrante, the CEO and Founder of Backpack, expressed his vision for Backpack Exchange, saying, “It’s time to put an end to the days of opaque crypto exchanges representing everything our industry stands against. It shouldn’t be normal to use an exchange with a single point of failure, without proof of reserves, or without auditability. A verifiable, unforgeable ledger is the exact problem blockchains solve, and Backpack Exchange is taking full advantage of that.”
The VASP license for Exchange Services, issued by VARA, allows Backpack Exchange to offer virtual asset exchange services to a diverse range of customers. VARA, as the world’s first independent regulator for virtual assets, plays a vital role in providing transparent and trusted oversight for the emerging virtual asset sector. Earlier this year, VARA introduced a bespoke regulatory framework for virtual assets, further solidifying Dubai’s position as a hub for blockchain and cryptocurrency innovation.
VARA, established in March 2022, is mandated to regulate, supervise, and oversee virtual assets and virtual asset activities across the Emirate of Dubai, including Special Development Zones and Free Zones. It plays a pivotal role in crafting a robust legal framework to safeguard investors’ interests and set international standards for the governance of the virtual asset industry. VARA’s mission aligns with Dubai’s vision for a borderless economy and further cements the emirate’s status as a global leader in the blockchain and cryptocurrency space.
Setting New Crypto Standards
Backpack Exchange is set to launch in a private beta this November, initially available to existing Backpack and Mad Lads community members. This phase will feature spot cryptocurrency trading functionality. The exchange plans to open its doors to the public in the first quarter of 2024. Additionally, the Backpack Exchange team is actively working to introduce various trading functionalities, including derivatives, margin trading, and cross-collateral, to provide users with a comprehensive trading experience.
Backpack Exchange aims to offer a seamless transition for users, enabling them to access fiat on and off-ramps directly through their Backpack Wallet, enhancing the user experience and making it easier for individuals to engage with decentralized applications and trade digital assets. However, it’s worth noting that Backpack Exchange is currently not available in certain jurisdictions, including Japan, Canada, and the United Kingdom, as regulatory approvals in those regions are pending.
As the cryptocurrency landscape continues to evolve, the launch of Backpack Exchange represents a significant step towards enhancing transparency and security in the industry, making it easier for users to access digital assets in a regulated environment. This move also highlights Dubai’s commitment to becoming a global center for blockchain and virtual asset innovation.
