The run recorded against one of the world’s leading cryptocurrency exchanges, FTX.com, caused the collapse of the crypto market on Tuesday that dragged Bitcoin (BTC) below US $ 17,500, its lowest value in the last two years. .
The losses of the main cryptocurrency exceeded 15% on Tuesday, while volatility took over the market and other cryptos fell between 15 and 30% in the last few hours, such as the case of Ethereum (ETH ), which fell 17.72% to US$1,320, according to data from the Coinmarketcap portal.
The worst case is FTT, the token of the FTX exchange, which lost 90% of its value after its founder announced the pause of withdrawals and the sale of the company to its main competitor, Binance, amid a “liquidity crisis” which caused a panic in the market.
The effect was also reflected in the total market value of cryptocurrencies, whose capitalization fell by almost 15%, going from US$974 billion to some US$820 billion, according to Tradingview data.
Binance announced the purchase of its main competitor
Changpeng “CZ” Zhao, CEO and founder of Binance, the world’s leading cryptocurrency exchange, announced that it has reached an agreement with FTX.com, its main competitor, to buy the firm after it went through a crypto bullfight from platform users, whose massive withdrawals put the entire sector in crisis.
Zhao’s letter of intent to acquire Binance Holdings came after a dispute between him and FTX founder Sam Bankman-Fried was made public this weekend, leading to undermining confidence in the financial strength of the company. company and caused a mass exodus of users from its platform.
This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire https://t.co/BGtFlCmLXB and help cover the liquidity crunch. We will be conducting a full DD in the coming days.
— CZ 🔶 Binance (@cz_binance) November 8, 2022
Terms of the purchase have not yet been made public, but Binance said the deal came amid “a significant liquidity crisis” that FTX suffered and the firm requested its help.
“To protect users, we signed a non-binding LOI, intending to acquire FTX.com and help cover the liquidity crisis,” Zhao said in a tweet.
For his part, Bankman-Fried used the same network to give “a big thank you to CZ, Binance, and all of our supporters” and that their teams “are working to eliminate the withdrawal backlog as they are,” after the company announced problems for its users to withdraw the cryptos from the platform.
“This will eliminate liquidity issues, all assets will be hedged 1:1. This is one of the main reasons why we have asked Binance to participate,” the FTX head assured.
The acquisition will reshape the market, as FTX handled an average of $2 billion in daily trades and is one of the world’s leading cryptocurrency operators.