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Binance Pulls Out of FTX Acquisition, Crypto Chaos Ensues

FTX's woes continued on Wednesday as Binance confirmed that they have cancelled the proposed acquisition of their beleaguered rival.In a statement released by Binance, the world's largest crypto exchange said: "As a resu...

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Binance Pulls Out of FTX Acquisition, Crypto Chaos Ensues

FTX's woes continued on Wednesday as Binance confirmed that they have cancelled the proposed acquisition of their beleaguered rival.

In a statement released by Binance, the world's largest crypto exchange said: "As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations. we have decided that we will not pursue the potential acquisition of FTX.com."

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 https://t.co/FQ3MIG381f.

— Binance (@binance) November 9, 2022

The non-binding letter of intent announced earlier this week was dependent upon due diligence. However, within less than two days of reviewing FTX’s internal data and loan commitments, Binance pulled out of the deal to purchase FTX which earlier this year was valued by private investors at $32 billion.

The proposed bail-out came after a massive liquidity crunch hit FTX, not least, in part, due to Binance's decision to sell off its entire holdings of FTX's exchange token FTT. The sell-off came after reports emerged expressing concerns over the balance sheet of Alameda Research, the corporate sibling of FTX and a key part of Sam Bankman-Fried’s crypto empire.

The CEO of Binance, Changpeng Zhao said on Wednesday that he “did not master plan” the collapse of its rival. In an email to his employees made public, Zhao also said the demise of FTX “is not good for anyone in the industry” and that Binance's staff should not “view it as a win for us.”

Crypto Markets Plunge

The whirlwind Binance FTX drama may have only lasted a couple of days (so far), but the news of the withdrawal sent crypto prices spiraling. At the time of writing, all of the major cryptocurrencies were down between 15 - 21% on the day. Bitcoin's market cap plunge to a two-year low on Wednesday whilst ETH hit a post-merge low.

This article was written by Finance Magnates Staff at www.financemagnates.com.

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