Binancethe world’s leading cryptocurrency exchangehad begun an evaluation stage to define the purchase of its rival FTX, which is in the midst of a liquidity crisis.
“This afternoon (Tuesday), FTX requested our help. There is a major liquidity crisis. To protect users, we signed a non-binding LOI (letter of intent), intending to fully acquire FTX and help cover the liquidity crisis. We will carry out a full DD (due diligence) in the coming days,” said Binance CEO Changpeng Zhao on Twitter.
This Wednesday, Binance issued a statement regarding the possible acquisition of FTX.
“As a result of corporate due diligence, as well as recent news reports regarding mishandled customer funds and alleged US investigations, we have decided that we will not move forward with the potential acquisition of FTX.com”, reported the company in its statement.
He indicated that initially the “hope was to be able to support FTX clients to provide them with liquidity”. But problems with the handling of the funds will prevent that purchase, he added.
Binance stated that: “Whenever a major player in an industry fails, retail consumers suffer. In recent years we have seen the cryptocurrency ecosystem become more resilient and we believe that over time the free market will weed out companies that misuse user funds.
This Wednesday, andl FTT, FTX tokenwas selling at US$4.49, with a daily drop of 70%.
