One of the world's largest crypto exchanges, Binance has signed a non-binding agreement to acquire one of its competitors, FTX.com, to “cover the liquidity crunch.”
It however said that the acquisition is subject to full due diligence which is coming up in a couple of days. The Binance CEO, Changpeng Zhao, said that “there is a lot to cover and will take some time. This is a highly dynamic situation, and we are assessing the situation in real-time. Binance has the discretion to pull out from the deal at any time.”
The acquisition is a result of the three-year-old crypto exchange’s request for help after facing a liquidity crunch. Concerns about FTX’s financial health reportedly triggered $6bn (£5.2bn) of withdrawals in just three days.
The panic withdrawals were in part due to a tweet on Sunday from Binance's CEO that the crypto exchange would sell its holdings of FTX’s digital token, known as FTT.
Founded in 2019 by Sam Bankman-Fried and Gary Wang, FTX.com is a cryptocurrency exchange company that develops a platform for professional trading firms.
FTX.com’s CEO Sam Bankman-Fried corroborated the acquisition story on Twitter saying, “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.)”
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