Binance Pulls Out of FTX Deal, Says Issues Were Beyond its Control
Binance has decided to walk away from the FTX deal due to reports of US investigations and mishandled users’ funds.
Leading cryptocurrency exchange Binance has pulled out from earlier plans to acquire FTX fully. Late Wednesday, the exchange tweeted that it will no longer pursue the potential acquisition of FTX, which admittedly repealed the closest chance the embattled crypto exchange had to raise liquidity for customers.
Binance Withdrew Amid Reports of Fund Mismanagement and US Probes
Besides the corporate due diligence, Binance said its decision to walk away from the deal stemmed from reports that FTX mismanaged customers’ funds, including the probes by several US agencies such as the Securities and Exchange Commission (SEC), and the Department of Justice (DOJ).
“In the beginning, 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,” Binance wrote.
On the announcement, the downside pressure on the crypto market resumed, resulting in about an 8% decline in the total market capitalisation to $830 billion. Bitcoin dropped over 8% to $15,588 on Binance, a level not seen since November 2020. Likewise, the majority of other altcoins dropped to record levels, including FTX Token (FTT), which is now trading at $2.2195.
What is Left for FTX?
Given the Binance bailout has fallen through, FTX’s founder Sam Bankman-Fried is currently seeking emergency funding in the form of equity and debt, or both, to shore up its liquidity issues, according to reports. So far, no investor or company have publicly shown interest in taking over the embattled crypto exchange.
People familiar with the matter told Wall Street Journal that FTX’s shortfall could be as deep as $8 billion. To FTX investors, Bankman-Fried reportedly said the exchange might resort to filing for bankruptcy if it fails to secure any rescue funding.
~By Ibiam Wayas ~
