Binance has agreed to buy rival crypto exchange FTX after the original exchange token FTT collapsed. The deal was confirmed by the CEOs of both parties, Changpeng Zhao (CZ) of Binance and Sam Bankman-Fried of FTX. In a tweet, CZ said that FTX is asking for help. Crypto enthusiasts added that the company signed a “non-binding letter of intent” to protect users, fully absorbing FTX and supporting a “significant liquidity crisis.”
Binance acquires FTX
So far, there are no financial details of the transaction between Binance and FTX. In addition, the acquisition does not include the US divisions of the two companies – Binance US and FTX US. The Binance boss wrote that there is still a lot of work to do to cover a settlement with Binance. He added:
“This is a very dynamic situation and we are assessing the situation in real-time. Binance reserves the right to withdraw from the transaction at any time. We expect FTT to be very volatile in the coming days as it develops.”
After the news that Binance acquired FTX, the FTT token started to recover. The local coin jumped as much as 25% from a low of around $14. FTX is starting to see FTT drop amid rumors that crypto exchanges have halted withdrawals. On the other hand, BNB also rose 10% to $368.07 in response to the news of the deal.
The successful acquisition means that the two largest crypto exchanges in the world will become one. This is expected to be a major development given that both crypto companies accounted for $34 billion in trading volume as of Tuesday morning. And according to CoinGecko, the number accounts for a quarter of combined trading on centralized exchanges.
Both CEOs confirm the pending deal
Prior to finalizing the transaction, both the CEO of Binance and FTX noted that their teams would conduct due diligence. Bankman-Fried wrote about the agreement in a Twitter thread, calling it a “strategic deal.” SBF also said:
“Our team is working on finalizing the backlog as it is. This eliminates liquidity problems; all assets are covered 1:1. This is one of the main reasons we asked Binance to step in. It might take some time to cool off etc – we apologize for that.”
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In conclusion, FTX leaders value Zhao and all of his supporters. He mentioned that the entire industry would benefit from the latest developments. He acknowledged that “CZ has and will continue to do an outstanding job of building a global crypto ecosystem and creating a freer world of business.”