Binance CEO Changpeng Zhao and FTX CEO Sam Bankman-Fried announced a tentative deal between the exchanges to “cover the liquidity crunch” at FTX.
Sam Bankman-Fried tweeted that he and Changpeng Zhao had “come to an agreement.” Binance will help secure FTX’s assets at a 1:1 ratio by acquiring the exchange.
Changpeng Zhao confirmed Binance’s intentions on Twitter. According to Binance CEO, he sent Bankman-Fried a non-binding letter of intent to acquire FTX. Zhao added that Binance analysts were evaluating the viability of such a decision and performing due diligence. Binance CEO stressed that the exchange could pull out of the deal anytime.
The announcement of the possible acquisition overturns all the rumors the community has been flooded with lately regarding the conflict between the two major cryptocurrency exchanges.
The balance sheet of Alameda Research, FTX’s corporate sibling, was made public on November 2 as Sam Bankman-Fried owns 100% and 50% of these companies, respectively. According to the report, Alameda Research has about $3.66 billion in unlocked FTT on its balance sheet. However, the native token volume of the FTX exchange didn’t exceed $2.16 billion.
Although Caroline Ellison, CEO of Alameda Research, tried to deny rumors that FTT was unsecured and FTX was insolvent, major lenders began withdrawing funds from the exchange. Among the first was Changpeng Zhao, who announced the sale of FTT assets, which was followed by a major move of about 23 million FTT tokens to Binance. It was Binance’s move that served as a signal to the community, and a total of over $451 million worth of crypto deposits were withdrawn from FTX within a week after the “exposure.”
The news of FTX’s possible purchase hit FTT’s price hard. As of 10:00 (GMT+2) on November 9, CoinGecko data shows that the token is trading at $4.65, having lost 75% of its value over the past 24 hours.Recall that earlier this year, FTX created a charity fund to invest in large-scale projects that can “improve humanity’s long-term prospects,” and Sam Bankman-Fried was actively “supporting” cryptocurrency companies struggling due to overall market decline.
