Binance Backs out of FTX Deal Citing ‘Due Diligence,’ Reports of ‘Mishandled Customer Funds’

The world’s largest cryptocurrency exchange Binance will not go through with purchasing the rival crypto exchange FTX. The company noted that after due diligence and “news reports regarding mishandled customer funds,” Binance has decided not to pursue the FTX acquisition.

After the crypto exchange Binance revealed it would purchase FTX, the exchange has detailed it has backed out of the proposed deal.

“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],” Binance said on Twitter.

Binance then noted that it wanted to help FTX’s customers but “the issues are beyond our control or ability to help.” The exchange further remarked that every time a major crypto business fails, retail investors suffer. “We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market,” Binance added.

The exchange concluded by adding that the ecosystem will benefit by stronger “regulatory frameworks” and “greater decentralization.” Cryto asset values dropped on the news and the entire crypto-economy is close to dropping below $800 billion, after dropping 10.56% during the last 24 hours. Bitcoin (BTC) dropped below $16K per unit at 4:30 p.m. (ET) on Wednesday afternoon following the news.

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