Binance CEO Changpeng Zhao has disclosed that his company is negotiating with FTX about a possible purchase. The acquisition of FTX follows research that revealed flaws in FTX and Alameda Research’s financial sheets, exacerbating the digital exchange’s liquidity issues.
For those who haven't been following:
The world's 2nd biggest crypto exchange (FTX) just got bought out today by the number 1 (BINANCE), because it was secretly insolvent by over $1 billion and couldn't cover withdrawals. This is the wildest timeline.
— Coffeezilla (@coffeebreak_YT) November 8, 2022
FTX CEO Sam Bankman-Fried confirmed the news, saying that “things have gone full circle” and that his company has “reached to an agreement on a strategic deal with Binance.”
The transaction’s details have not been made public, but experts anticipate a complete disclosure in the coming days. Binance has the authority to walk away from the non-binding agreement if agreements cannot be achieved between both sides, and Binance is claimed to be doing due diligence.
FTX was valued at an astonishing $32 billion a few months ago and had a history of providing credit lines to distressed enterprises. Things turned for the worse amid suspicions that FTX was on the verge of collapse, with Reuters reporting that FTX may have reported $6 billion in net withdrawals.
— Wall Street Silver (@WallStreetSilv) November 8, 2022
At the start of the week, the industry was a buzz with suspicions of a schism between Zhao and Bankman-Fried, notably after Binance announced the sale of its FTT tokens and other cryptic tweets.
Bankman-Fried, on the other hand, has said that there is no feud between the two founders and that they are dedicated to creating a healthy ecology. It is vital to note that the transaction will not affect FTX.US or Binance.US since they are separate organizations that operate separately.