Woofun AI reports that Backpack EU secured the MiCA license and PSD2 payment institution license from the Latvian Central Bank on the afternoon of July 1, 2026, Beijing time, as announced by Eric for Foresight News. Combined with its pre-existing MiFID II license and payment institution license, the firm now holds comprehensive authorization across encryption, brokerage, and payments. The MiCA license specifically governs the custody and exchange of crypto assets, while the MiFID II license covers derivatives contracts, securities, and brokerage services, and the payment institution license manages stablecoin payment services. While industry giants including Binance failed to secure entry into the EU market, Backpack successfully established its foothold. This regulatory breakthrough facilitated an immediate recovery for a company that had faced severe liquidity issues and a slump in its BP token price during the first half of the year. The BP token began rising at the end of May, reaching a peak of nearly $0.80 in mid-June before stabilizing around $0.60. The company's trajectory has evolved from emerging from the shadow of FTX to rapid growth fueled by the SOL ecosystem, facing difficulties amid market fluctuations, and ultimately rising again through rigorous compliance efforts.

The origins of Backpack trace back to April 2022, when Armani Ferrante, who had joined the SOL ecosystem as early as 2020 to develop the Anchor framework, founded the company with colleagues. Their objective was to create an interactive self-custody wallet capable of tokenizing applications using xNFTs in a manner similar to images. In September 2022, Backpack raised $20 million in funding led by FTX Ventures.

However, 88% of this amount, totaling $14.5 million, was deposited by the team into FTX. Two months later, the collapse of FTX nearly terminated the venture immediately. The team persisted, entering what Armani termed "roach mode" with the remaining approximately $1.4 million. In April 2023, during one of the worst bear markets in the crypto industry, Backpack launched the Mad Lads NFT series. Unexpectedly, this pixel-style avatar series topped overall on-chain trading volume in its first week, surpassing high-value projects on Ethereum that traded for tens of thousands of dollars each. Mad Lads eventually became the NFT with the highest market cap on SOL, generating significant revenue that allowed Backpack to sustain operations.

In February 2024, the test version of Backpack Exchange was officially launched. Leveraging the strong momentum of the SOL ecosystem and the loyal user base built by the Mad Lads community, the exchange achieved daily trading volumes exceeding $1 billion just four days after going live. The SOL/USDC trading pair alone generated more than $800 million in 24 hours, occasionally exceeding the depth of the same pair on Binance and Coinbase. Over the following year, Backpack continued its rapid expansion. Its cumulative trading volume approached $400 billion, annual revenue exceeded $100 million by 2025, and its valuation soared from $120 million in its Series A round to $1 billion, establishing it as a new unicorn. Subsequently, Backpack spent $32.7 million to acquire FTX EU, the European subsidiary of FTX, thereby obtaining the MiFID II license that was once part of SBF's empire. It took eight months to pass the reviews of the Cyprus Securities and Exchange Commission before returning all funds to the 110,000 former FTX EU users. This strategic move generated significant industry attention and positioned the new exchange prominently.

The cyclical nature of the cryptocurrency market proved relentless. Entering the second half of 2025, as Bitcoin fluctuated at high levels before falling, overall market activity began to cool down significantly. In the first quarter of 2026, crypto spot trading volume dropped by nearly 40% year-on-year, with monthly trading volume in March reaching its lowest point since November 2023. Overall industry funding and risk-on sentiment were shrinking, and Backpack was no exception. Daily trading volume on its platform declined from billions of dollars at its peak to just millions of dollars. On March 23, 2026, Backpack issued its native token BP, with 75% of it locked in two pools: 37.5% is unlocked based on the company's operational milestones and potential IPO, while the other 37.5% in the corporate treasury is locked for at least a year after successful listing in the U.S. Long-term holders of BP can even exchange their tokens for shares. Although the token issuance was innovative, it could not stop the decline in trading volume. Observers noted thin order books for many tokens on Backpack and volatile price charts throughout the first half of the year. With the benefits from airdrop expectations and the growth of the SOL ecosystem now exhausted, Backpack needed a new narrative.

A new strategy was already in development. In June, Backpack launched Backpack Securities and entered the field of tokenized U.S. stocks through collaboration with the Sunrise tokenization protocol on SOL. On June 12, the same day SpaceX set a record for an IPO financing of $75 billion by pricing shares at $135 each, Backpack listed SPCX. The BP token surged 27% on that day, and by the time Backpack Securities was announced, it had already risen by over 87% in a single day. From partnering with VARA in Dubai to acquiring FTX EU to obtain the MiFID II license, and then being accepted by the Japan Virtual Currency Exchange Association in December 2024 as the first Category 2 member since Binance, Backpack has consistently followed a strategy of "obtaining licenses first, then expanding." While it is unlikely Backpack could have predicted today's trends in the crypto industry from four years ago, its commitment to compliance has played a crucial role. Recognizing the potential in RWA tokenization, the firm promptly acquired brokerage licenses, enabling it to thrive in this new narrative.

Woofun AI data shows that the integration of these regulatory frameworks directly correlated with the 87% single-day surge in BP token value following the securities announcement.

As investors in the crypto space turned to U.S. stocks, Backpack allowed users to trade U.S. stocks directly on its platform using European-compliant brokerage licenses. It also enabled users to mine gold on-chain through Sunrise tokenization. The European crypto compliance licenses provided a distinct competitive edge in the European market. On the other hand, Backpack US's leadership team includes former members and acting chairman of the CFTC, Mark Wetjen, as well as former SEC commissioner and chief economist for the Senate Banking Committee, Michael S. Piwowar, among other former U.S. regulatory officials. In what may be the world's largest crypto market, Backpack has adopted forward-thinking strategies tailored to local conditions. This approach allows the platform to navigate complex regulatory landscapes while offering diverse financial instruments to its user base.

In terms of crypto trading, Backpack will find it difficult to compete in the short term against established players, but in the U.S. stock market, it is not far behind traditional exchanges and has managed to weather storms when some smaller exchanges faced crises.

However, the advantages brought by compliance, just like during the SOL ecosystem boom, cannot last forever. Larger exchanges will eventually catch up in terms of compliance, and this advantage won't persist long. Backpack has faced some setbacks in crypto trading operations, leading to reduced user activity and lower trading depth. Now, once again at a pivotal moment, Backpack still needs to address the same question: how to turn its advantages into sustainable competitive advantages? The transition from a crypto-native wallet to a regulated securities platform represents a fundamental shift in business model that requires continuous adaptation to maintain relevance in a rapidly evolving financial landscape.