Binance is Lending a Helping Hand to FTX with Agreement to Acquire the Company

Binance is Lending a Helping Hand to FTX with Agreement to Acquire the Company

It seems that Binance is throwing a life jacket at its rival FTX.

Binance, the largest crypto exchange in terms of daily trading volumes, is reportedly planning to acquire its rival crypto exchange FTX.

According to a tweet shared by FTX founder and CEO Sam Bankman-Fried, Binance and FTX made a strategic transaction agreement.

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In its six-tweet Twitter thread, Bankman-Fried highlighted that both teams are working on clearing out “liquidity crunches,” making all assets covered 1:1. On top of that, FTX's CEO emphasized that customers shouldn’t worry as he promised them full protection.

It is worth noting that FTX US and Binance US are not impacted by this acquisition.

In its Twitter thread, FTX CEO Sam Bankman-Fried showed immense gratitude towards Binance and its CEO Chnagpeng (CZ) Zhao.  

A *huge* thank you to CZ, Binance, and all of our supporters. This is a user-centric development that benefits the entire industry. CZ has done, and will continue to do, an incredible job of building out the global crypto ecosystem and creating a freer economic world.

Sam Bankman-Fried denied all rumors about a possible conflict between his company FTX and Binance. Citing that Binance is focused on making a “more decentralized global economy” and FTX is “in the best hands.”

Binance’s CEO Changpeng (CZ) Zhao also used Twitter to cover the news, stating:

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 FTX and help cover the liquidity crunch. We will be conducting a full DD in the coming days.

In his tweets, Zhao highlighted that Binance can still pull out of the deal at any time. Moreover, following the acquisition announcement, Binance CEO shared a separate tweet covering “two big lessons” to be learned regarding FTX’s situation.

FTX’s saga began on November 6th, when Changpeng Zhao announced Binance’s plans to liquidate all of its FTX native token, FTT holdings, citing that the decision was made due to “recent revelations that have come to light.”

In response, Sam Bankman-Fried’s company’s Alameda Research CEO, Caroline Ellison, offered to purchase all of Binance’s FTT tokens for $22 per token. However, Changpeng Zhao declined the offer.

At the time of writing, Binance’s native token, BNB, retails for $319.13, recording a 2.29% price drop. On the other hand, FTX’s native token, FTT, retails for $5.04, recording a price drop of 70.92% in the last 24 hours.

Gile K. - Crypto Analyst

by Gile K. - Crypto Analyst, BitDegree