Binance Highly Unlikely to Move Forward with the Acquisition of Rival FTX

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CEO of FTX Bankman-Fried
CEO of FTX Bankman-Fried

Binance is highly unlikely to continue with its proposed acquisition of rival FTX less than a day after it said it would step in and rescue the failed exchange amid solvency worries Coindesk reported Wednesday. 

Binance was leaning against completing the emergency deal after reviewing FTX’s internal data and loan commitments, the report said, citing a person familiar with the matter.

Changpeng Zhao, Binance’s CEO and co-founder, said Tuesday that FTX asked his company for help amid a ​”significant liquidity crunch”. Binance was performing its due diligence on FTX under a non-binding letter of intent for the purchase, a move taking place less than a year after FTX carried a $32 billion valuation. 

FTX before striking a deal with Binance had sought help from other large exchanges Coinbase and OKX but it was turned down, according to the Coindesk report. 

Contagion fears began cropping up last week following reports of heavy exposure to FTX’s native token, FTT, on Alameda’s balance sheet. FTT on Wednesday dipped 79% to $3.81