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

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.

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.