SNEAK PEEK
- Binance announced on Nov. 2 that it had agreed to acquire competitor cryptocurrency exchange FTX.
- After weeks of rumors that FTX and corporate sibling Alameda Research were experiencing a liquidity issue.
- Binance CEO Changpeng “CZ” Zhao revealed on Twitter that the two leading cryptocurrency exchanges have signed a non-binding statement of intent.
Binance is the largest cryptocurrency exchange by volume, and FTX was valued at $32 billion at the beginning of this year. Financial details of the purchase were not made public, despite the fact that FTX US, a separate division of FTX, was not a part of it.
The merger, which was announced in tweets like so much else during the nearly week-long drama, brings together two of the biggest names in cryptocurrency trading.
FTX CEO Sam Bankman-Fried tweeted We have reached an agreement on a strategic transaction with Binance for FTX.com (pending DD etc.),”
1) Hey all: I have a few announcements to make.
— SBF (@SBF_FTX) November 8, 2022
Things have come full circle, and https://t.co/DWPOotRHcX’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for https://t.co/DWPOotRHcX (pending DD etc.).
Changpeng “CZ” Zhao, CEO of Binance, also announced the agreement on Twitter, stating the two exchanges had signed a non-binding letter of intent. Both Bankman-Fried and Zhao stated that a thorough due diligence procedure would start in the following several days.
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
CZ’s choice reduced the cost of FTT. The CEO of Alameda, Caroline Ellison, then tweeted on Sunday that in order to lessen the impact on prices, she will purchase every FTT token offered by Binance for $22.
Numerous customers voiced their complaints about their problems in FTX’s Telegram group and on Twitter. Money withdrawal obstacles foreshadowed the bankruptcy of several more cryptocurrency companies in 2022. Following the agreement, FTX’s FTT token initially rose, but this only lasted a short time; after starting the day just under $20, it is currently trading at $5.
