Binance Backs Out Of Its Deal To Buy FTX

Twitter icon  •  Published há 1 ano  •  Hassan Maishera

Leading cryptocurrency exchange Binance has revealed that it would no longer acquire its rival FTX after looking at FTX’s books.

Cryptocurrency exchange Binance has reportedly backed out of a deal to acquire its rival FTX. According to Binance, FTX’s situation is beyond its help at the moment.

Earlier this week, Binance, the world’s leading cryptocurrency exchange, announced that it had signed a non-binding letter of intent (LOI) to acquire FTX, one of its major rivals. According to Binance CEO Changpen Zhao, the acquisition is designed to help FTX overcome its current tough situation and save users.

However, Binance has now revealed that it will no longer be acquiring FTX. According to the crypto exchange, FTX’s situation is beyond their help. In its statement, Binance said;

“Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.”

Changpeng Zhao sent a letter to Binance staff yesterday, reminding them that the deal with FTX was not finalized as Binance had to look at FTX’s books. As such, Zhao urged its staff to refrain from trading FTT, the native tokens of the FTX exchange. He said;

“As soon as I finished the call with SBF yesterday, I asked our team to stop selling as an organization. Yes, we have a bag. But that's ok. More importantly, we need to hold ourselves to a higher standard than even in banks."

If the deal had gone through, Binance would have gone miles ahead of other cryptocurrency exchanges and established its position as the market leader for years. According to data obtained from Coinmarketcap, Binance has a daily trading volume of $44 billion. Coinbase comes in second with $5 billion, while FTX processes over $4 billion daily. Adding FTX’s trading volume to its order book will make Binance the undisputed king of crypto, and this could probably last for years.

FTT, the native coin of the FTX exchange, has lost roughly 90% of its value over the past few days. It was trading at around $25 per coin a week ago, but it is now trading at $2.63 per coin.

Over the past few days, some leading crypto companies, including Coinbase, Crypto.com, Tether, and Genesis, have distanced themselves from FTX. 

Author

Hassan Maishera

Hassan is a Nigeria-based financial content creator that has invested in many different blockchain projects, including Bitcoin, Ether, Stellar Lumens, Cardano, VeChain and Solana. He currently works as a financial markets and cryptocurrency writer and has contributed to a large number of the leading FX, stock and cryptocurrency blogs in the world.