Binance declared its intention to fully buy FTX in order to shield its consumers from a liquidity crisis.
Binance declared its intention to fully buy FTX in order to shield its consumers from a liquidity crisis.
Binance CEO Changpeng Zhao stated on Twitter that FTX sought the exchange’s assistance since it was experiencing liquidity issues on its platform. Binance has signed a non-binding letter of intent (LOI) to buy CZ in the next few days, according to CZ.
A comprehensive due diligence procedure and more precise details on the acquisition are scheduled to be completed over the next several days.
“There is a lot to cover, and it will take time.” “This is a highly dynamic situation, and we are examining it in real-time,” CZ tweeted. “Binance has the option to withdraw from the transaction at any moment.”
In addition, CZ said, “We anticipate that FTT will be quite volatile in the following days as events unfold.”
The transaction was confirmed by Sam Bankman-Fried, the founder and CEO of FTX and Alameda Research, who stated that Binance was the first and last investor in FTX.
SBF stated that FTX had reached an “agreement on a strategic transaction” with Binance, but gave no time range for when the acquisition will be completed.
SBF reaffirmed that customer funds will be safeguarded while Binance and FTX worked to remove the withdrawal backlog. For more than three hours, FTX failed to process any withdrawals on the Ethereum blockchain.
All assets on FTX will be covered 1:1, and the exchange’s liquidity crisis will be resolved, according to SBF in a tweet.
