Backpack US, a cryptocurrency exchange, has announced the appointment of Michael S. Piwowar, a former Acting Chairman of the U.S. Securities and Exchange Commission (SEC), to its board of directors. This strategic move coincides with Backpack’s expansion into regulated financial products, including a new platform for trading both traditional and tokenized equities, and its plans to offer regulated perpetual futures trading in the United States.
Key Takeaways
- Former SEC Acting Chairman Michael S. Piwowar has joined the board of Backpack US.
- Piwowar’s tenure at the SEC included overseeing the rejection of a Bitcoin ETF proposal and a cautious approach to initial coin offerings.
- Backpack US is expanding its offerings to include traditional and tokenized equities, and plans to launch regulated perpetual futures trading in the US.
- The appointment signals a growing trend of industry players seeking experienced regulatory expertise to navigate an evolving legal landscape.
- This development follows the Commodity Futures Trading Commission’s (CFTC) recent approval of regulated Bitcoin perpetual futures contracts.
Piwowar, who previously served as an SEC commissioner from 2013 to 2018 and as acting chairman, stated that the U.S. digital asset regulatory environment is entering a new phase characterized by increased focus on integrating innovation within established financial market structures through clear rules and oversight. He expressed optimism about the growing momentum towards regulatory clarity and robust market infrastructure.
During his time at the SEC, Piwowar, despite opinions that Bitcoin itself was not a security, adopted a cautious stance towards the initial coin offering (ICO) boom, emphasizing investor protection and warning against crypto-related scams. Notably, during his four-month tenure as acting chairman in 2017, the SEC denied the Winklevoss twins’ long-standing proposal for a Bitcoin exchange-traded fund (ETF).
Piwowar’s background also includes serving as chief economist for the U.S. Senate Committee on Banking, Housing, and Urban Affairs, where he was instrumental in the SEC-related aspects of the Dodd-Frank Act and the JOBS Act. He also held a senior economist position on the President’s Council of Economic Advisers during the Global Financial Crisis, providing him with extensive experience in financial regulation and market stability.
The appointment of Piwowar aligns with Backpack’s aggressive growth strategy. The company, which originated as a Solana-based wallet from the team behind the Mad Lads NFT collection, recently launched its stock trading platform. This platform aims to provide users with access to both conventional stocks and tokenized equities, bridging traditional finance with digital assets.
Furthermore, Backpack has indicated plans to expand its perpetual futures (perps) trading services within the U.S. This follows the CFTC’s recent decision to allow Kalshi to offer the first regulated Bitcoin perpetual futures contract. Backpack currently operates regulated perps trading in the European Union. Mark Wetjen, President of Backpack US and a former CFTC commissioner and acting chairman, highlighted the significance of the CFTC’s approval as a pivotal moment for the market, enabling offshore-available products to become accessible on U.S.-regulated exchanges through a coordinated regulatory approach.
Backpack has also outlined ambitious plans for its future, including a potential public offering. The company has announced a proposed “post-IPO” company treasury backed by 37.5% of its total 1 billion exchange token supply. Additionally, an equity-linked staking model is planned, which would reward stakers with 20% of the company’s equity.
Founded in 2023, Backpack secured $17 million in a Series A funding round in 2024. The round was led by Placeholder VC, with participation from Robot Ventures, Wintermute, and Selini, underscoring investor confidence in the company’s trajectory and its approach to regulated digital asset markets.
Potential Regulatory Precedent
The appointment of Michael S. Piwowar to Backpack US’s board, coupled with the company’s expansion into regulated products like traditional and tokenized equities and perpetual futures, could signify a maturing phase for the digital asset industry in the United States. The involvement of former high-ranking regulators like Piwowar suggests a strategic effort by crypto firms to align with existing financial regulatory frameworks and proactively address compliance concerns. This trend may encourage other platforms to seek similar expertise, fostering a more compliant and integrated ecosystem. The CFTC’s approval of regulated Bitcoin perpetual futures, and the subsequent move by Backpack to offer such products under U.S. jurisdiction, sets a precedent for the regulated derivatives market in digital assets. This cooperative approach between U.S. regulators, as highlighted by Wetjen, could pave the way for further innovation within a controlled and compliant environment, potentially easing the path for future product approvals and market development.
Original article : www.theblock.co