Backpack founder responds: OTC cashing out is fake news, and the oversimplification of anti-witchcraft is our mistake.

Backpack exchange founder Armani Ferrante recently took to social media to personally address the four major community FUDs: OTC cashing out, the disparity in treatment of Mad Lads NFTs, the witch hunt controversy, and FDV concerns. He denied the cashing out allegations and admitted that the execution of the witch hunt was overly simplified, which was a team mistake.
(Background: The Chinese team went head-to-head with Europe and America last night! Backpack’s anti-witch hunt affected a large number of Chinese-speaking users, and the official complaint and buyback compensation have been initiated.)
(Background supplement: How will gambling and prediction markets destroy the world? There’s darker stuff to come.)

Table of Contents

Toggle

• Refuting OTC cashing out: Fake news
• Mad Lads NFT and the witch hunt controversy
• FDV and tokenomics design

The on-chain exchange Backpack’s token BP has seen ongoing FUD around multiple issues since its TGE on March 23. Founder Armani Ferrante recently took to social media to respond to the four controversies point by point, using a direct tone, but readers should note that this is the founder’s one-sided public declaration.

On FUD.

FUD is an opportunity to either address misunderstandings or to identify mistakes and simply fix them. With every TGE, emotions run hot, as people focus on a single number, the token price, determining one’s feelings. It’s human nature, and because Backpack has such a…

— Armani Ferrante (@armaniferrante) March 27, 2026

Refuting OTC cashing out: Fake news

On the widely circulated OTC cashing out allegations, Armani Ferrante took a strong stance, stating that this claim is fake news.

He explained that the reality is that a buyer reached out to him, hoping to acquire more tokens through OTC, and he and the team facilitated this transaction, with the seller being a buyer, not him liquidating his own holdings.

He also admitted that this misunderstanding has its origins. In the past, other projects have indeed allowed insiders to cash out through OTC, and the community has historical baggage regarding similar operations, making it easy to associate.

Previously, Backpack officially announced that the founder, executives, team members, and VCs did not receive direct token allocations at TGE, and team tokens are locked for at least a year.

Mad Lads NFT and the witch hunt controversy

The dissatisfaction in the Mad Lads NFT community centers on the old holders retaining Backpack VIP status before TGE, while new holders who bought in after TGE do not enjoy this qualification.

Armani Ferrante stated that the development path of Mad Lads has been tied to Backpack from the beginning, with each stage of design focused on long-term holders. He acknowledged that later entrants may have different perceptions and expectations regarding the NFT positioning, and this gap leading to friction is understandable, but the team does not intend to change its commitments to long-term supporters to appease new buyers.

Regarding the witch hunt, this is the area where Armani Ferrante did not respond as strongly among the four controversies. He said that the motivation for the anti-witch campaign is to protect retail users and prevent unfair advantages through account splitting. However, he admitted that the execution of the anti-witch measures was overly simplified and did not fully consider the complexity of community structures, which was a mistake by the team.

According to an earlier official announcement, this witch hunt investigation identified and recovered over 50 million “fake points,” and appeals have been opened. Users with fewer than three accounts can reclaim over 50% of their tokens after review; Backpack also plans to buy back tokens in the secondary market to compensate affected eligible users.

FDV and tokenomics design

In response to the criticism about the high FDV (Fully Diluted Valuation) after TGE, Armani Ferrante’s reply was that the short-term price or FDV of BP is fundamentally unimportant.

He stated that the design of the tokenomics is intended to use “extreme methods” to incentivize the team to build long-term. If the token goes to zero and the company fails, the team receives nothing. The team’s rewards come solely from genuine long-term success and are unrelated to short-term price fluctuations.

The BP token had its TGE on March 23, with a total supply of 1 billion tokens, and 25% (250 million tokens) were released at TGE, of which 240 million were allocated to point holders and 10 million to Mad Lads NFT holders.

As mentioned, the above is Armani Ferrante’s public response; whether the content is accurate remains to be validated by the community.