Changpeng Zhao (CZ), CEO of Binance, announced that Binance intends to acquire the entirety of the FTX.com exchange in order to “cover its liquidity crisis”.
According to Zhao, on November 8, FTX requested Binance’s help to find a solution to protect its users from the platform’s lack of liquidity.
After talks between the two exchanges Binance proceeded to sign a non-binding LOI with FTX, which will allow the subsequent acquisition of the exchange.
It also indicated that the possible acquisition will take some time so the FTX token (FTT) is likely to experience a lot of volatility in the coming days.
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. We expect FTT to be highly volatile in the coming days as things develop.
— CZ 🔶 BNB (@cz_binance) November 8, 2022
“There is a lot to cover and it will take time. This is a very dynamic situation, and we are assessing the situation in real time. Binance has the discretion to pull out of the deal at any time. We expect FTT to be highly volatile in the coming days as things develop.” argued CZ.
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 🔶 BNB (@cz_binance) November 8, 2022
FTX CEO speaks out on exchange’s troubles
Sam Bankman-Fried (SBF), CEO of FTX, spoke out today via his Twitter account about the problems FTX.com is going through, noting that they had to enlist Binance’s help because “things [at the exchange] have gone full circle.”
According to SBF, FTX reached an agreement with Binance on a strategic transaction that is pending review, whereby Binance could buy FTX.com if it chooses to do so.
For now Binance is helping them solve liquidity problems by covering all user withdrawals.
1) Hey all: I have a few announcements to make.
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.).
— SBF (@SBF_FTX) November 8, 2022
Finally, SBF thanked CZ and Binance for their help, contradicting their statement yesterday where they assured that everything was fine at FTX and that some competitors (Binance) were raising false rumors against them.
https://twitter.com/SBF_FTX/status/1589598284322328579
“I know there have been rumors in the media of conflict between our two exchanges, however, Binance has proven time and time again that they are committed to a more decentralized global economy while working to improve industry relations with regulators. We are in the best of hands,” said SBF.
The deal still depends on regulatory approval, and it is unclear whether antitrust issues will arise from the transaction.
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