Binance has withdrawn its plans to acquire FTX after examining the organization’s structure and financial situation, the company announced on Wednesday, putting Sam Bankman-Fried’s empire on the verge of bankruptcy.
One day earlier, Binance CEO Changpeng Zhao revealed that the world’s biggest crypto company had struck a non-binding agreement to acquire FTX’s non-U.S. operations for an undisclosed amount, saving the business from a liquidity crunch.
But now, with Binance backing out, the company is in a precarious position. Zhao said in a statement:
In the beginning, Binance said in a tweet on Wednesday, “our objective was to be able to serve FTX’s customers to provide liquidity.” Furthermore, he added, “ But the issues are beyond our control or ability to help.”
The decision by Binance comes as the crypto market is seeing a significant correction.
Zhao initially consented to help, but his company swiftly changed its mind, citing accusations of “mishandled customer funds and alleged U.S. agency investigations.”
The collapse of the Binance-FTX deal is the most recent episode in a startling implosion that has shaken the crypto community this week. On Monday, Bankman-Fried tried to convince investors that the company’s assets were secure.
Between Monday and Tuesday, FTT lost 80% of its value, dropping to $5 and wiping out more than $2 billion in a single day.
On Wednesday, it fell by more than half to about $2.30, bringing the entire market value of the tokens in circulation down to about $308 million.
Amid the deal turbulence, cryptocurrencies have fallen, with bitcoin plummeting 15% on Wednesday. For the first time since November 2020, it is currently trading below $16,000. With the ongoing events, BTC and Ethereum have seen a sharp decline as well. Notably Ether has declined more than 30% in the last two days and is on the verge of dropping below $1,000.
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Source: Cryptocurrency - investing.com
