Binance abandons acquisition of competitor FTX. Cryptocurrency exchange Binance says it does not want to acquire the company after further investigation by FTX and by recent reports of government investigations and alleged misuse of customer money.
“Initially, we hoped to support FTX’s customers by providing liquidity,” writes Binance. “But the issues at FTX are beyond our control or our ability to help.” The cryptocurrency exchange announced on Monday that it wanted to acquire FTX after the latter was in sudden money problems, but indicated that it could withdraw from the deal at any time.
Those money problems arose after FTX turned out to have less liquid assets than expected, due to a link with another exchange, Alameda Research. Binance CEO Changpeng Zhao then decided to sell his FTX coins, causing a bank run on the FTX exchange and the FTT, the cryptocurrency of FTX. As a result, the FTX quickly lost a lot of value on Tuesday.
Binance and FTX together are two of the largest cryptocurrency trading places. Set CNBC Resources that before Binance said it wanted to take over the exchange, FTX turned to investors for emergency financing. The stock market would be about eight billion dollars short. It is not clear what FTX will do next.
Binance states that “every time a major player in an industry goes down, consumers are the victims.” “We have seen the crypto ecosystem become more resilient in recent years and we believe that outliers that seek to abuse customer funds will eventually be weeded out by the free market.”
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) Nov 9, 2022