The world’s largest cryptocurrency exchange, Binance, will absorb one of its main competitors in the face of the FTX platform. In fact, FTX was forced into a deal as it was facing virtual bankruptcy due to the massive withdrawal of funds from the platform by users. Moreover, this situation was actually provoked by Binance itself. The information was confirmed by Binance CEO Changpeng Zhao.
FTX’s troubles began after Binance’s boss himself accused his competitor of cheating with FTT tokens issued by FTX itself. Following this, Binance began selling these tokens and many others followed suit, bringing the asset’s price down from $22 to $14.2 this afternoon. After that, users started withdrawing funds from FTX at all – in the last three days they have withdrawn more than $6 billion, as a result of which the company faced a lack of liquidity. The company suspended user withdrawals and was forced to enlist help from Binance.
“This afternoon FTX asked us for help. There is a significant liquidity bottleneck. To protect users, we have signed a non-binding letter of intent for a full acquisition of FTX.”, Zhao wrote on his Twitter account. The financial terms of the transaction were not disclosed, but it is known that it will not affect US FTX US and Binance US, which are separate companies.
FTX CEO Sam Bankman-Fried also confirmed the deal, adding that work is in progress to fix the payout delays. To that end, FTX turned to Binance to address the liquidity crunch. He apologized to the platform’s users, adding that it might take some time to resolve the funds withdrawal issue. Note that the non-binding memorandum of understanding signed by the parties grants Binance the right to withdraw from the transaction at any time.
Note that news of Binance’s purchase of the FTX platform led to a 20% increase in the cost of the FTT token to $17.50 per coin. However, after that, the price collapsed even further, hitting a low of $2.56. At the time this material was published, the exchange rate was $5.26. Many other cryptocurrencies also fell sharply. Bitcoin fell to around $18,000.