Binance backs out of FTX acquisition deal
Quick Take
- Binance will not buy FTX.
- “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 said.
Crypto exchange giant Binance will not buy FTX after reviewing the company's financials.
"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 said in a statement.
FTX had agreed yesterday to sell its non-U.S. assets to the rival exchange amid a liquidity crunch related to the collapse of its native exchange token FTT. But successive reports cast doubt on the likelihood, with sources citing an insurmountable financial hole in FTX's books.
The Block reported yesterday that FTX had been looking to raise outside capital at a valuation of $10 billion to $20 billion prior to announcing the deal with Binance. At the time, Binance CEO Changpeng Zhao called the deal a non-binding LOI, subject to due diligence.
The exchange had experienced around $6 billion in net withdrawals in the days leading up to Tuesday morning, according to a Telegram message from Bankman-Fried to staff.
FTX is one of the largest derivatives exchanges in the crypto market and has been an active investor in companies throughout the industry. FTX and Alameda provided companies in the market with $750 million in credit lines, as Fortune reported.
Bitcoin fell as low as $16,027, according to TradingView data. At 4:20 p.m. ET, bitcoin was trading hands at $16,120.
(Updates with market trading after the news.)
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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