Crypto platform Binance to buy struggling rival FTX
France Media Agency
November 9, 2022 | 8:04
LONDON, UK — Binance, the world’s largest cryptocurrency exchange, has agreed to buy financially-struggling rival FTX.com, according to an announcement posted on Twitter on Tuesday.
In a tweet, Binance CEO Changpeng Zhao said the group had signed a non-binding letter of intent “to fully acquire FTX.com”, which is suffering from “a significant liquidity crisis”.
No financial terms were disclosed for the proposed deal, the announcement of which came as bitcoin and other cryptocurrencies initially crashed on Tuesday following fallout from FTX’s woes.
Binance offered to intervene after it revealed it was liquidating its holdings of FTX’s FTT token amid concerns over FTX’s finances.
Bitcoin slid more than 5%, trading below $20,000 before recovering, while FTX’s FTT token fell 25% to its lowest levels since the start of 2021.
The crypto industry continues to lick its wounds since the so-called stablecoin TerraUSD and a related token, Luna, crashed in May this year, removing tens of billions of face value from the market.
Bitcoin’s fall, meanwhile, comes after the world’s leading cryptocurrency’s recent big gains.
Billions of tokens
“The problem is in the cryptocurrency market today as the FTX coin continues to plummet…, driving sentiment,” said Walid Koudmani, chief market analyst at XTB.
“Binance…announced that it will sell FTX tokens worth approximately $2.1 billion due to uncertainty related to Alameda Research, a company linked to the FTX exchange.”
Koudmani added that financial documents belonging to Alameda “indicate problems with the balance sheet, namely the value of assets not matching liabilities.”
Binance was founded in 2017 by a Chinese-Canadian entrepreneur but, following the regulation of its activities in China, moved its operations to Bahrain, Dubai, Paris and the Cayman Islands.
The company revealed on Friday that funds belonging to or destined for Iranians have passed through its platform, risking violation of sanctions imposed by the United States.
News of the FTX deal on Twitter comes after Zhao recently said that the social media platform now owned by Tesla boss Elon Musk may become more integrated into the cryptocurrency world in the future. and blockchain.
Zhao, a major Twitter investor, was keen to stress that he’s happy to let Musk do whatever he wants with the social media platform.
There are currently over 10,000 cryptocurrencies sitting on many different blockchains after bitcoin was created in 2008.