Binance is set to buy cryptocurrency exchange FTX | The Financial Express

Binance is set to buy cryptocurrency exchange FTX

The announcement follows a testing period for FTX, whose FTT token dropped 30% on Tuesday.

Binance is set to buy cryptocurrency exchange FTX
Binance announced over the weekend that it planned to sell its token holdings, causing concern about FTX's financial health

Binance is set to acquire cryptocurrency exchange FTX following a liquidity crisis at the company led by billionaire Sam Bankman-Fried, which has resulted in increased withdrawals and financial difficulties.

Source: Twitter

Taking to Twitter, Binance CEO, Changpeng Zhao, said, “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.”

The announcement follows a testing period for FTX, whose FTT token dropped 30% on Tuesday.

“This afternoon, FTX asked for our help,” tweeted Binance chief executive Changpeng Zhao. “There is a significant liquidity crunch. To protect users, we signed a non-binding (letter of intent), intending to fully acquire FTX.com.”

Binance announced over the weekend that it planned to sell its token holdings, causing concern about FTX’s financial health. “We have come to an agreement on a strategic transaction with Binance,” Bankman-Fried tweeted on Tuesday, adding that “CZ has done, and will continue to do, an incredible job of building out the global crypto ecosystem, and creating a freer economic world.” The transaction was confirmed by FTX.

Graph showing BNB price from November 7 to November 8, 2022.
Source: CoinGecko

Meanwhile, Binance’s native token BNB skyrocketed in response to the acquisition, surging more than 20% in minutes.

It is to be noted that SBF stated that FTX has reached an “agreement on a strategic transaction” with Binance, but gave no time frame for when the acquisition will be completed. SBF reiterated that customer funds would be safeguarded while Binance and FTX worked to clear the withdrawal backlog.

Also Read: Binance expected to liquidate its entire stake in FTX tokens

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First published on: 08-11-2022 at 22:42 IST