The World’s Largest exchange takes over!! Binance set to acquire FTX.
It’s going to be a difficult few months after what appeared like the biggest episode in cryptocurrency history, when FTX, the third-largest cryptocurrency exchange in the world, was forced to cede its position to Binance due to financial difficulties.
FTX CEO Sam Bankman-Fried aka SBF tweeted “Things have come full circle, and FTX.com’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for FTX.com (pending DD etc.).”
Binance signed a non-binding LOI, intending to fully acquire FTX and help cover the liquidity crunch that the latter is facing, and the financial details of the deal are yet not disclosed.
Binance CEO CZ noted that Binance has the discretion to pull out from the deal at any time, and as it is a highly dynamic situation, the team is assessing the situation in real time.
So how did it all end up like this? Well, the past few days have been very traumatizing for the community since SBF’s crypto trading firm Alameda Research’s balance sheet got leaked showing its exposure to FTXs native token FTT.
Later, CZ announced Binance is liquidating its FTT tokens that they received last year as part of Binance’s exit from FTX equity “due to recent revelations.”
This caused widespread panic and users started withdrawing their assets from the exchange while the value of FTT plummeted on the side.
Also Read: Binance CEO CZ Rejects Alameda Research Offer to buy FTX’s Tokens
“A competitor is trying to go after us with false rumors. FTX is fine. Assets are fine,” SBF tweeted but his words did bite him back in the end.
As per his latest statement, SBF asserts that customers are protected and thanked CZ, Binance, and all FTX supporters for their assistance.
“I know that there have been rumors in media of conflict between our two exchanges, however Binance has shown time and 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,” SBF praised Binance like no other.
SBF did clarify that FTX US and Binance US are two separate companies and are not currently impacted by this.
But the main issue is that Binance is only gearing up to acquire FTX and not Alameda Research which is the root cause for this insolvency.
Meanwhile, SBF’s net worth went down from $16 billion to $991 million in 24 hours, and currently, the FTT token is trading at a price of $4, down 70%.
Rumors are floating in saying that FTX tampered with users’ assets for its trading operations in Alameda Research and used FTT as collateral leaving a giant hole in the balance sheet.
People are worried about how big is the gap in the balance sheet for FTX to agree to a buyout by its rival Binance who exposed its insolvency in the first place.
This event is going to be more traumatizing than the Terra collapse as it concerns one of the trusted top exchanges, who a few months back, was playing a savior role to help companies who got affected by the Terra-LUNA crash.
Also Read: Why Terra Luna is Crashing Down with its Stablecoin UST?
Yesterday FTX even halted withdrawals for a few hours causing more panic and users expecting a Celsius-style fallout in the end.
Now what we don’t know is if Binance will ultimately buy FTX and protect the users who got adversely affected but even that wouldn’t justify FTXs act of messing with users’ assets while a few days back they claimed everything is OK.
