Binance Walks Away From FTX Acquisition

Binance Walks Away From FTX Acquisition

  • Binance walks away from FTX deal following due diligence.
  • Firm also mentioned U.S. investigations of FTX.
  • Retail investors are left hanging without access to funds.

Binance will not move forward with the acquisition of rival exchange FTX, the company said in a tweet Wednesday afternoon.

“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance said.

The news leaves retail investors wondering whether they’ll ever gain access to funds held by FTX again after the exchange came under extreme liquidity pressures earlier this week. The turmoil likely stemmed from a CoinDesk article that detailed worrisome links between FTX, its native token FTT, and Alameda, a research and trading firm also owned by FTX boss Sam Bankman-Fried. The coverage got the attention of Binance chief Changpeng Zhao, who shortly after tweeted that his company would be selling all FTT tokens it held.

CZ’s tweet sparked a feud with SBF, who said, in a since-deleted tweet, that FTX was fine and assets held by the company were as well. Soon after, however, the deal between Binance and FTX came to light, with SBF then conceding to a “liquidity crunch.”

The bailout sparked optimism in the industry. However, CZ made it clear from the start that Binance could walk out from the deal “at any time.” Notably, the company had yet to perform due diligence by analyzing FTX’s financial books in order to decide whether to move forward with the acquisition.

After reviewing the financial condition of FTX, Binance has officially decided to not purchase the non-U.S. business operations of FTX. Additionally, Binance also mentioned recent reports on U.S. investigations into FTX over mishandled customer funds and lending.

Published at Wed, 09 Nov 2022 22:38:08 +0100

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