CZ: Binance Intends to Fully Acquire FTX
Binance CEO has announced that FTX asked for their help, and an acquisition of the Sam Bankman-Fried-led exchange could be in the pipeline.
Binance, the largest crypto exchange in terms of trade volume and users, intends to purchase one of its largest competitors, FTX.com.
The plans to acquire FTX were made public via Twitter by Binance CEO Changpeng Zhao. Mr Zhao explained that FTX had reached out to Binance for help due to the ongoing liquidity crunch caused by FTX users withdrawing their funds from the exchange en-masse.
Binance to Sign a Non-Binding Letter of Intent
CZ added that Binance intended to sign a non-binding letter of intent to protect FTX users and to cover the earlier stated liquidity crunch. Binance will also carry out all the required due diligence in the coming days to finalise the deal.
It is Likely Binance Acquired FTX for a Negligible Amount — DeFiance Capital Founder
A potential acquisition of FTX by Binance comes at an opportune time as the crypto markets seem to be headed towards another meltdown. The announcement has since halted the selloff that could have seen Bitcoin lose its crucial $19k support level.
However, the speed at which the deal was made has prompted some crypto Twitter community members to speculate that the Binance acquisition of FTX was potentially a bargain, given the underlying situation.
One such theory has been floated by DeFiance Capital’s founder, @Arthur_0x, who believes that Binance acquired FTX for a negligible amount, given its liabilities.
FTX.com Has Had a Rough Few Days
The last few days have been a turbulent time for the FTX crypto exchange as rumours spread that it was on the brink of insolvency. FTX’s woes seemed to continue to multiply as its users globally started what could only be described as a bank run to get assets out of the exchange.
Many traders and investors cited UST’s collapse and the financial hurdles being faced by Celsius, Three Arrows Capital and other bankrupt crypto projects as the reason behind wanting to get their assets off of FTX.com before it was too late.
FTX’s woes were amplified when CZ announced via Twitter that Binance would be liquidating its FTT holdings, estimated to be worth $584 million at the time of the announcement. CZ had also explained that the move was part of Binance’s risk management after LUNA’s collapse in May.
Moving forward, it will be an interesting few days and weeks as Binance acquires FTX, which has already bailed out multiple collapsed crypto projects such as BlockFi and Voyager digital.
~By John P. Njui~
