The industry’s largest crypto exchange has inked a deal to acquire rival FTX.com for an undisclosed amount.
UPDATE 11/9: Binance announced that it is no longer pursuing the acquisition of FTX.com due to “reports regarding mishandled customer funds and alleged US agency investigations.”
FTX.com is FTX’s non-US business venture and is based in the Bahamas, where CEO Samuel Bankman-Fried resides. Its stateside business, FTX-US (FTX.us), will remain an independent company outside of the influence of Binance.
Binance is the largest crypto exchange in the world by volume. The acquisition agreement rests on a non-binding letter of intent pending Binance’s full due diligence into FTX’s business. Binance’s US operations will not be affected by the deal, either.
The financial terms of the acquisition were not disclosed.
Binance co-founder and CEO Changpeng Zhao, commonly known as CZ, confirmed the news in a series of tweets on Tuesday.
Bankman-Fried also confirmed the news and shared some insights on what’s happening with mass liquidation on the platform.
Axios reported that the companies shared the acquisition news publicly before communicating directly to investors.
Rumors about FTX’s future have been circulating since the summertime. In August, Bloomberg reported that FTX was merging its venture operations with principal trading firm Alameda Research; Bankman-Fried holds an equity stake of approximately 90% in Alameda. The companies denied the deal, and it never went through.
Binance acquiring FTX.com constitutes something of a full-circle moment for the company given that Binance was one of FTX’s first investors.
Notably, FTX temporarily halted processing withdrawal requests from customers on its platform this week. This caused a frenzy that arrived as reports circulated of CZ and Bankman-Fried engaging in a Twitter feud over the weekend; CZ dispelled those rumors and explained why the pair again ended up in the news.
(For reference: FTX’s native crypto token, FTT, is down 58% in the last 24 hours and down 64% in the last week, according to CoinGecko data.)
CZ shared on Sunday that Binance would be liquidating the rest of its FTT assets. This amounted to 22,999,999 FTT, or about $584 million. Binance’s CEO said this wasn’t a move against its rival and more of a post-exit risk management tactic.
Bankman-Fried backed all this up in his series of tweets today.
“I know that there have been rumors in media of conflict between our two exchanges, however Binance has shown time and again that they are committed to a more decentralized global economy while working to improve industry relations with regulators. We are in the best of hands,” Bankman-Fried tweeted about Binance’s pending deal to acquire FTX.com
Boardroom will continue to follow what’s happening in the crypto industry, including a deeper dive FTX’s fall from grace.
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