Key Takeaways:
- Crypto exchange Binance has backed out from the FTX deal
- The company had earlier announced plans to acquire FTX after the latter's native token FTT tanked over 80%
- The announcement comes after Binance had a closer look into the company books
YEREVAN (CoinChapter.com) — Binance, the world’s largest cryptocurrency exchange, has backed out from plans to buy Sam Bankman-Fried’s crypto exchange FTX. As per the latest announcement by the company, a closer look into the company’s books has forced them to have a change of heart.
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com,”
the company announced.
According to the Changpeng Zhao-led exchange, the problems which FTX faces, “are beyond our control or ability to help“.
The decision will send the already-ailing FTT token (the native crypto of the FTX exchange) to complete $0.
A huge victory for Binance?
As CoinChapter earlier reported, Changpeng Zhao (CZ) had sent the FTT crypto token tumbling after announcing it will offload its FTX token holdings. The decision came after the leaked balance sheet of Alamada Research, Sam Bankman-Fried’s trading firm, revealed the company held large amounts of FTT tokens issued by his exchange.
FTT lost around 80% of its value on November 9, falling to $3 from $26 days back. This resulted in a contagion spiral, sending the larger markets into a sea of red.
Bitcoin (BTC), the largest cryptocurrency fell under $17,000. Ethereum (ETH), the second-largest crypto by market cap, also fell below $1,200. However, one of the largest to be hit was Solana (SOL), which found itself caught in the Alameda fiasco.
Earlier this week, reports emerged that Sam Bankman-Fried had allegedly lobbied against Binance. According to accusations, he even financed anti-Binance articles in the press, sometimes attacking CZ and his family directly.
This did not go down well with Zhao, who decided to finish him off for good. The fallout resulted in Bankman-Fried asking Binance to bail FTX out.
“This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days,”
CZ announced.
Earlier, the Binance CEO had issued a message to all company employees, clarifying that FTX folding was not good for the industry. In the elaborate text, Zhao also clarified that his company “did not masterplan this or anything related to it“.
In an earlier report, CoinChapter had predicted that Binance would back out from the FTX deal. With one swift move, Changpeng Zhao has eliminated a huge competitor, consolidating its stronghold over the industry.
