Crypto exchange Binance refuses to buy FTX
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On Wednesday, November 9, late in the evening, the Binance cryptocurrency exchange informed that it will not buy its competitor FTX, which is facing a severe liquidity crisis. Binance announced plans to buy a few days ago. “As a result of the check (situations in FTX.— “b”) prior to investing, and in light of recent news of customer mishandling and alleged US regulatory investigations, we have decided to move away from a potential acquisition of FTX.com. Initially, we hoped that we could support FTX customers by providing liquidity, but the problems are beyond our ability and ability to help,” Binance said.
Problems FTX, which was recently valued at $32 billion, began last week. At that time, Coindesk wrote that Alameda Research, another company of FTX founder Sam Bankman-Fried, had too many tokens issued by FTX, some of which were also pledged, on the balance sheet. After that, the founder of Binance, Changpeng Zhao, sold almost $600 million worth of FTX tokens. Then other owners of these tokens also began to actively sell them, the rate fell sharply, and the exchange itself announced problems with liquidity.
Shortly thereafter, Binance made an offer to buy FTX. However, then in the American media there were reports of more serious problems with the exchange. As written The Wall Street JournalBankman-Fried told investors that he urgently needed $8 billion in funding to meet withdrawal requests from the exchange’s clients. Besides, Bloomberg citing sources, wrote that the US Securities and Exchange Commission has already launched an investigation against FTX.
Bitcoin and other cryptocurrencies have dropped quite a bit in recent days on FTX related news. After Binance announced its refusal to buy FTX, bitcoin fell another 13%, thus its rate was the lowest since the end of 2020 – below $16,000.
Read more in the material “Crypto exchange crashed the crypto market”.
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