Binance intends to acquire Bankman-Fried's FTX amid 'significant liquidity crunch'

Nov. 08, 2022 11:42 AM ETFTX Token (FTT-USD)By: Max Gottlich, SA News Editor8 Comments

House Financial Services Committee Examines Digital Assets

Alex Wong

Changpeng Zhao's cryptocurrency exchange, Binance, has tentatively agreed to buy Sam Bankman-Fried's crypto exchange, FTX, on Tuesday against a backdrop of growing concerns about the latter's solvency.

"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.)," SBF wrote in a Twitter post, adding that the U.S. businesses of FTX and Binance were not included in the deal.

In providing more details about the FTX acquisition, CZ confirmed the deal in which both parties signed a non-binding letter of intent in the wake of a "significant liquidity crunch" at FTX, he wrote via Twitter.

"There is a lot to cover and will take some time. This is a highly dynamic situation, and we are assessing the situation in real time. Binance has the discretion to pull out from the deal at any time. We expect FTT to be highly volatile in the coming days as things develop," he added.

FTX did not immediately respond to a request for comment by Seeking Alpha.

Immediately after the news hit, FTX Token (FTT-USD) erased nearly half of its intraday losses, currently down around 20% to $18.21 at 11:42 a.m. ET compared with $14.39 just prior to SBF's tweet.

The move comes on the heels of CoinDesk's story last week that questioned the overlap between FTX and SBF's hedge fund, Alameda Research, due to its massive stake in FTX's FTT (FTT-USD) tokens.

On-chain data showed earlier that FTX seemingly halted processing client withdrawals. In a follow-up Twitter post, SBF noted that "our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1."

Earlier, bitcoin sinks below $20K as FTX Token at heart of FTX-Alameda drama tumbles.

Recommended For You

Comments (8)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.