Backpack CEO says allegations of OTC dumping by the team are “fake news"

Armani Ferrante, the founder and CEO of Solana-based exchange Backpack, has moved to quell a wave of community anger, allegations of insider selling, and market manipulation as the BP token shed more than half its value from its peak just a few days after launch.

Backpack launched its BP token on Solana on March 23 with 25% of the one billion total supply distributed to users via an airdrop.

According to its tokenomics, no allocation was made to its founders, team members, or investors at inception. The remaining supply is tied to long-term lockups linked to company milestones and a potential initial public offering.

However, despite its “community-friendly” tokenomics, BP has not fared so well, having reached an all-time high of $0.4499 before sliding to $0.1404, a fall of more than 68% at the time of writing.

In a lengthy post on X, Ferrante addressed what he called a tide of misinformation circulating in the days after the token generation event, taking on allegations of over-the-counter insider sales, discriminatory Sybil enforcement, and the management of the token’s price decline.

What are the specific allegations Backpack is pushing back against?

There were allegations that Backpack executives were using OTC transactions to offload their own tokens. Ferrante flatly denied this, saying, “I can’t believe I have to say this, no, we aren’t OTCing our own tokens to cash out. See the tokenomics. Fake news. End of story. What is true: buyers reached out to me and asked for OTC.”

Ferrante acknowledged that the optics were damaging, given the history of other crypto projects deploying OTC deals to cash out.

In a separate incident that occurred on March 25, Backpack confirmed that a trader attempting to manipulate BP token prices on the decentralized prediction platform Polymarket was not affiliated with its team, writing on X, “These traders are not insiders. They are not employees, directors, officers, advisors, or in any way affiliated with Backpack. We have zero tolerance for insider trading of any kind.”

Ferrante also addressed concerns from some of the holders of the platform’s Mad Lads NFT collection, who were upset that newly acquired NFTs would not carry the same VIP status as those held before the token launch.

He defended the decision as consistent with Backpack’s approach of rewarding long-term product users over new holders, tracing the collection’s evolution through airdrops, whitelist mechanics, NFTs, and VIP points programs, among others.

Where did Backpack admit it got things wrong?

The Sybil controversy was an area where Ferrante made his only admission of error.

Ferrante stated that their goal was to protect retail users competing for points against sophisticated players who were splitting accounts and giving themselves an unfair advantage over those that didn’t.

According to the Backpack founder, the mistake they made was that their process was too rigid. “From the team’s point of view, we had a line, and we stuck to it. From the community’s point of view, the line is nuanced. We did not sufficiently take that into consideration,” he wrote, adding that they are reviewing the cases around Sybils.

Many users flagged as Sybils had their points slashed or zeroed, including long-term small-scale participants and high-volume traders, with the Chinese community disproportionately affected.

The Sybil criteria were never publicly disclosed, and the resulting opacity triggered a trust crisis.

Ferrante tried to downplay the fully diluted valuation (FDV) after the post-token generation event (TGE) as a metric that’s not meaningful, stating that they are building for the long term.

Can Backpack survive this turbulence?

So far, Backpack’s token is taking a hit, as it seems Ferrante’s explanation is not having the desired results on its fortunes yet.

However, despite the turbulent few days since launch, there are some features of the BP tokens that may help survive the test of this time. Users who stake BP for a minimum of one year have the opportunity to convert their tokens into actual Backpack company equity, a mechanism with few precedents in crypto.

As of early 2026, Backpack Exchange has reportedly reached about $400 billion in cumulative trading volume, sometimes exceeding $1 billion in daily volumes. This shows that the platform has genuine commercial traction beneath the launch noise.

Beyond the particulars, Backpack, which was repeatedly pressed by its community to launch its token, now has to turn to them to get the token back to a promising start. Ferrante called on the community to take a look at the tokenomics, writing, “Every project goes through trials and tribulations. This is certainly a moment for us. We are nothing without our community, and we will serve it in the best way we know how.”

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