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Backpack CEO rejects OTC cash-out claims, concedes missteps on ‘witch hunts’

Published

2 hours ago

27 March 2026

Phemex integrates Ondo tokenized stocks and ETFs for 10m users.

Backpack CEO Armani Ferrante denies BP OTC cash‑outs and downplays FDV focus as anger over “witch hunt” Sybil bans forces appeals, buybacks and a fairness rethink.

Summary

Backpack founder Armani Ferrante denied that the team sold BP tokens over-the-counter to cash out, calling the rumors “FUD.”
Ferrante said earlier OTC comments were only meant to help large buyers find liquidity, not to facilitate insider sales.
He admitted the exchange’s handling of “witch hunt” Sybil cases was “too mechanical” and promised re-evaluations, while downplaying short-term FDV as a meaningful metric.

Backpack founder and CEO Armani Ferrante has moved to calm a backlash around the exchange’s BP token launch, publicly denying that the team conducted over-the-counter sales to exit its position and conceding that its aggressive anti-Sybil process has unfairly hit parts of the community. 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,” adding that “FUD is an opportunity to either address misunderstandings or to identify mistakes and simply fix them.” [x.com] He stressed that past mentions of OTC were “only about helping serious buyers find tokens,” not about offloading the team’s allocation.

The comments follow days of anger over BP’s token generation event on March 23, where airdrop rewards were sharply reduced or revoked for users flagged as “witches,” or suspected Sybil accounts. On X, Ferrante acknowledged that the review process had become overly rigid, writing that the team’s approach to witch cases had been “too mechanical” and that “more complex cases are being re-evaluated.” An analysis by AInvest noted that Backpack has now opened an appeal channel and committed to restoring up to 50% of tokens for some affected users, alongside a buyback program aimed at stabilizing BP’s secondary-market liquidity.

The storm erupted as BP began trading with a fully diluted valuation that quickly pushed toward the $200 million range, in line with probabilities markets had already priced in. In February, Odaily reported Polymarket markets assigning a 98% chance that BP’s FDV would exceed $100 million and an 87% chance it would surpass $200 million on the day after listing, implying a price range of roughly $0.10 to $0.20 per token. AInvest later estimated that BP had fallen to about $0.27, putting its FDV near $200 million as community trust wobbled.

Ferrante, however, urged users to look past short-term market swings. “FDV is not the core metric we are optimizing for,” he wrote, arguing instead that “long-term product-market fit, compliance and transparency” would determine Backpack’s eventual value. As [KuCoin] reported ahead of TGE, Backpack has touted a more “IPO-like” tokenomics structure tied to its underlying equity and compliance footprint, operating in fewer than half of global jurisdictions to stay within regulatory guardrails.

The current crisis lands at an awkward time for Backpack, which has heavily marketed itself as a post-FTX “safety first” exchange with daily proof-of-reserves and a Solana-focused trading stack. In a previous crypto.news story, Ferrante described the exchange as an attempt to “do it the right way” after losing $14.5 million in the FTX collapse and watching industry trust evaporate. Now, the exchange’s promise of fairness is being tested by users who feel blindsided by airdrop clawbacks and suspicious of any hint of OTC activity.

Backpack’s response—public denials of OTC cash-outs, a softer line on witch cases, and a renewed emphasis on long-term alignment—will determine whether the BP launch is remembered as a messy but fixable rollout or as the moment the project’s social capital peaked. In a market still scarred by exchange blowups and opaque token deals, how Ferrante follows through on these promises may matter more than BP’s next tick on the chart.

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Crypto World

ECB Study Questions How Decentralized DeFi Governance Really is

Published

6 minutes ago

27 March 2026

NewsAdmin

ECB Study Questions How Decentralized DeFi Governance Really is

The European Central Bank published a working paper on March 26, finding that governance in four major DeFi protocols was heavily concentrated.

The staff paper looks at Aave, MakerDAO, Ampleforth and Uniswap, and finds that while governance tokens are held across tens of thousands of addresses, the top 100 holders control more than 80% of the supply in each protocol.

Based on holdings snapshots from November 2022 and May 2023, the authors found that a large share of governance tokens could be linked either to the protocols themselves or to centralized and decentralized exchanges, with Binance the largest identified centralized exchange holder across the four protocols.

The authors said the findings challenge the idea that decentralized autonomous organizations (DAOs) are inherently decentralized, raising questions about accountability and complicating efforts to identify possible regulatory anchor points under the European Union’s Markets in Crypto-Assets Regulation (MiCA) framework. MiCA currently excludes “fully decentralised” services from its scope.

Top token holders dominate governance

The authors also look at who actually votes on key proposals, concluding that top voters are mostly delegates who wield delegated voting power from smaller token holders.

The top 20 voters in Ampleforth control 96% of delegated voting power, while the top 10 voters in MakerDAO hold 66% of delegated votes, and the top 18 in Uniswap hold 52%. Around one-third of top voters cannot be publicly identified, and among those that can, the largest groups are individuals and Web3 companies, followed by university blockchain societies and venture firms.

*ECB Working Paper on DeFi: Source:* *ECB*

Cointelegraph reached out to Aave, Uniswap, MakerDAO, and Ampleforth, but had not received a response by publication.

Kavi Jain, senior research associate at Bitwise, told Cointelegraph that many large DeFi protocols were not as decentralized in practice as they might appear, especially in the earlier stages, where a small group still has “meaningful influence over decisions.”

He pointed to the recent Aave governance debate that highlighted how, even with a DAO structure, voting power can “still be concentrated among a few participants.”

MiCA faces DeFi accountability problem

The paper catalogues what governance actually decides, finding that the largest share of proposals relates to “risk parameters” that shape the protocols’ risk profiles. That raises further questions about accountability, especially given that it is “not possible” to tell from public data whether protocol-linked holdings belong to founders, developers or treasuries, or whether exchange wallets are voting their own positions or those of customers.

There are some caveats with the methodology, and the paper itself warns that it does not capture the “full scope of the DeFi ecosystem,” due to insufficient data.

The paper also stresses that it reflects the authors’ views rather than official ECB policy, however, it warns that the difficulty of reliably identifying who controls major protocols makes it harder to lean on popular entry points such as governance token holders, developers or centralized exchanges, and says that the relevant anchor may differ protocol by protocol and require information that is not publicly available.

Its findings echo earlier warnings from the Financial Stability Board and others, cited in the paper, that DeFi’s promise of disintermediation often masks new forms of concentration and governance risk that resemble, and sometimes amplify, those seen in traditional finance.

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