Crypto giant Binance agrees to acquire rival FTX November 8, 2022
Crypto giant Binance agrees to acquire rival FTX<BR><BR><BR><BR>
Crypto giant Binance agrees to acquire rival FTX
Crypto exchange behemoth Binance agrees to acquire Bahamian cryptocurrency exchange rival FTX as the company ended the liquidity crunch, the announcement shook the crypto market.
The arrangement marks the victory for Changpeng Zhao, Binance founder, and a humbling comedown for the founder of FTX, Sam Bankman-Fried. Though FTX was growing and gaining much recognition among investors, however, the clash between the two giants rattled investors confidence in FTX.
On Tuesday, the CEO of Binance Changpeng Zha said that his company has signed a non-binding LoI (Letter of Intent) to completely acquire rival cryptocurrency exchange FTX. Zhao said in a series of tweets, “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.”
Changpeng Zha said that there is a lot to cover and will take some time. “This is a highly dynamic situation, and we are assessing the situation in real-time,” Zhao said, adding that Binance has the discretion to pull out from the deal at any time. “We expect FTT to be highly volatile in the coming days as things develop.”
FTX CEO Sam Bankman-Fried pointed out that things have come full circle, and FTX’s first, and last, investors are the same. “We have come to an agreement on a strategic transaction with Binance for FTX (pending DD etc).”
Sam informed that his teams were working on clearing out the withdrawal backlog, “This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. — we apologize for that…But the important thing is that customers are protected.”
He showed his gratefulness to Binance for the deal and claimed that this is a user-centric development that is in the favor of the entire industry. The FTX executive thanked Binance for the deal and said that this is a user-centric development that benefits the entire industry. He said Zhao has done and will continue to do, an incredible job of building out the global crypto ecosystem and creating a freer economic world.
Sam tried to end rumors about the conflict between the two companies. He exclaimed, “There have been rumors in media of conflict between our two exchanges. However, Binance has shown time and again that they are committed to a more decentralized global economy while working to improve industry relations with regulators. We are in the best of hands.”
He further said, “ FTX and Binance – two separate companies– are not currently impacted by this. FTX’s withdrawals are and have been live, is fully backed 1:1, and operating normally.”