Backpack CEO denies OTC “cash‑out,” admits heavy‑handed Sybil enforcement as token launch backlash grows Backpack CEO Armani Ferrante pushed back this week against accusations that the team sold its own BP tokens via over‑the‑counter (OTC) deals, while conceding the exchange’s anti‑Sybil enforcement around the token generation event (TGE) went too far for some users. In a detailed post on X, Ferrante wrote: “OTC. I can’t believe I have to say this, no, we aren’t OTCing our own tokens to cash out.” He added that prior mentions of OTC were intended “only about helping serious buyers find tokens,” not about offloading the team’s allocation. Ferrante framed the episode as a chance to “address misunderstandings or to identify mistakes and simply fix them.” What went wrong The controversy centers on Backpack’s March 23 TGE, when airdrop rewards were sharply reduced or revoked for users flagged as “witches” — accounts suspected of being Sybils. Community outrage over those clawbacks and opaque enforcement quickly mounted, with critics dubbing the process a “witch hunt.” Ferrante acknowledged the enforcement had been “too mechanical,” saying more complex cases are being re‑evaluated. Backpack has now opened an appeal channel and committed to restoring up to 50% of tokens for some affected users, according to analysis by AInvest. The exchange also announced a buyback program designed to shore up BP’s secondary‑market liquidity. Market reaction and FDV debate BP’s listing sent its fully diluted valuation (FDV) toward the ~$200 million area, a figure that some probability markets had already baked in. In February, Odaily cited Polymarket markets assigning a 98% chance BP’s FDV would top $100 million and an 87% chance it would exceed $200 million the day after listing — implying an initial price band near $0.10–$0.20 per token. AInvest later estimated BP’s price around $0.27, putting FDV near $200 million as trust in the project wobbled. Ferrante pushed back on the notion that FDV should be the headline metric. “FDV is not the core metric we are optimizing for,” he wrote, urging stakeholders to focus on “long‑term product‑market fit, compliance and transparency.” Backpack’s positioning and the stakes The backlash comes at an awkward moment for Backpack, which has marketed itself as a “safety first” exchange in a post‑FTX market. The firm emphasizes daily proof‑of‑reserves, a Solana‑focused trading stack, and tokenomics it says are more “IPO‑like,” tied to underlying equity and a compliance footprint that keeps operations in fewer than half of global jurisdictions, as reported by KuCoin before the TGE. Ferrante has previously described Backpack as a response to the FTX collapse — the firm lost $14.5 million in that failure — and as an attempt to “do it the right way.” Whether the BP launch is remembered as a correctable misstep or a turning point for community trust will depend on follow‑through: transparent appeals, meaningful remediation for wrongly penalized users, and credible execution of buybacks and compliance commitments. In a market still sensitive to exchange opacity and token distribution drama, how Backpack acts from here may matter more than BP’s next price move. Read more AI-generated news on: undefined/news