Update: After less than 24 hours of Binance’s intent to purchase FTX, CEO of Binance, Changpeng Zhao announced on Twitter, “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.” The news led to a cascade of Bitcoin liquidation, new 52 week lows, and price levels not seen since 2017.
Two of the world’s largest crypto exchanges are set to become one entity. After a week of turbulence at FTX, the crypto exchange led by Sam Bankman-Fried may soon be acquired by Binance CEO Changpeng Zhao, who is also known as CZ, and become part of Binance’s portfolio.
CZ said on Twitter that Binance has filed a letter of intent to soon acquire their longstanding rival, FTX, a crypto exchange that offers access to over a dozen crypto coins from BTC to ETH to FTT, the native token that the exchange itself mints.
This news comes as a twist after Binance announced earlier in the week that they intended to sell over $500 million of FTX’s FTT coin in Binance’s custody over the course of several months.
The decision to liquidate FTX’s native token caused a massive downturn in the token’s price and almost led to a bank run on FTX’s reserves by retail investors who held assets on FTX’s platform.
Binance’s decision to acquire FTX was made in part to “protect users” and “help [FTX] cover the liquidity crunch.” FTX was most recently in talks to also acquire another now-bankrupt crypto exchange, Voyager, and help retail investors recoup a portion of their frozen funds. Binance’s intention to acquire FTX now puts that deal in jeopardy.
This segment aired on 5 Live on Tuesday, Nov. 8, 2022.