Digital Assets: Binance Agrees To Buy (Non-US) FTX After Bankman-Fried Reveals Liquidity Crunch
Trouble started (read: run) after Binance tweeted intentions to sell its FTT holdings due to “recent revelations.”
Binance, the world’s largest crypto firm, has agreed to buy rival crypto exchange FTX, which is owned by billionaire Sam Bankman-Fried, for an undisclosed amount. Binance CEO Changpeng Zhao revealed in a tweet that FTX asked for Binance’s help in tackling a significant liquidity crunch, and therefore it “signed a non-binding LOI, intending to fully acquire http://FTX.com and help cover the liquidity crunch.” (CNBC)
The deal includes only the non-US businesses of FTX. FTX.us will therefore be outside its purview.
What sparked the crunch
Binance CEO Changpeng Zhao had tweeted over the weekend that Binance would liquidate its holdings of about $2.1 billion of FTT saying: “Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books.”
The statement started a rush to liquidate FTT as panicked investors rushed for the exits fearing for the solvency of both FTX and its sister concern Alameda Research.
FTX: Full circle
“Things have come full circle, and http://FTX.com’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for http://FTX.com (pending DD etc.),” tweeted Sam Bankman-Fried this morning.
“Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. — we apologize for that,” Bankman-Fried added.
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