Backpack CEO Armani Ferrante has pushed back against accusations that the exchange secretly sold its own BP tokens via over‑the‑counter (OTC) deals — while also admitting the platform mishandled its anti‑Sybil enforcement around the token launch.
Ferrante took to X to deny the most serious charge: “OTC. I can’t believe I have to say this, no, we aren’t OTCing our own tokens to cash out,” he wrote, adding that previous references to OTC were “only about helping serious buyers find tokens,” not about the team offloading its allocation. He framed the backlash as an opportunity to “address misunderstandings or to identify mistakes and simply fix them.”
The controversy centers on BP’s token generation event (TGE) on March 23. As BP began trading, a number of users found their airdrop rewards sharply reduced or revoked after being flagged as “witches” — suspected Sybil accounts. Ferrante conceded the review process had become “too mechanical,” saying more complex cases are being re‑evaluated. Backpack has since opened an appeal channel, pledged to restore up to 50% of tokens for some affected users, and announced a buyback program intended to stabilize BP’s secondary‑market liquidity.
Market reaction added fuel to the fire. BP started trading with a fully diluted valuation that quickly approached the $200 million range. In February, Polymarket probability markets had priced a very high likelihood of a large FDV — assigning a 98% chance BP’s FDV would top $100 million and an 87% chance it would exceed $200 million on the day after listing, implying an approximate price range of $0.10–$0.20 per token. AInvest later estimated BP trading near $0.27, putting its FDV close to $200 million as community trust wobbled.
Ferrante urged the community not to focus solely on short‑term headline FDV numbers. “FDV is not the core metric we are optimizing for,” he wrote, stressing Backpack’s emphasis on “long‑term product‑market fit, compliance and transparency.” That positioning aligns with Backpack’s broader pitch: an “IPO‑like” tokenomics structure tied to underlying equity and tighter compliance, limiting operations to fewer than half of global jurisdictions to stay inside regulatory guardrails (a detail previously reported by KuCoin).
The episode lands at an awkward time for Backpack, which has marketed itself as a post‑FTX, “safety‑first” exchange with daily proof‑of‑reserves and a Solana‑focused trading stack. Ferrante has previously said the exchange was built to “do it the right way” after he lost $14.5 million in the FTX collapse. Now the company’s fairness and transparency claims are being tested by users who feel blindsided by airdrop clawbacks and wary of any hint of OTC activity.
What to watch next: whether Backpack follows through on appeals and token restorations, details and execution of the buyback program, clarification on any OTC activity (or lack thereof), and how BP’s price and community sentiment evolve. How Ferrante and the team act now will determine if this episode becomes a messy but fixable rollout — or a turning point in the project’s social capital.
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