Binance Signed a Nonbinding Agreement to Acquire FTX

Binance, the largest cryptocurrency exchange in the world, has signed a nonbinding agreement to purchase FTXcom, a unit of major rival FTX, after a lengthy feud on Twitter the last few days.

According to Binance CEO Changpeng Zhao on Tuesday, the purchase will help cover a “liquidity crunch” at Binance.

“This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire  and help cover the liquidity crunch. We will be conducting a full DD in the coming days.,” CZ wote on Twitter

Binance FTX Deal 

Bankman-Fried on Twitter noted that the deal excludes FTX US and Binance US, the respective US operations of each cryptocurrency exchange.

“There is a lot to cover and will take some time. 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,” said Binance CEO.

Read More: How Crypto Tokens Are Fairing Following The Binance FTX Fallout! 

The deal would combine two of the world’s largest cryptocurrency exchanges. CoinGecko data shows that Binance and FTX combined for $34 billion in trading volume on Tuesday morning.

Zhao and Bankman-Fried both confirmed that their respective teams would conduct due diligence on the deal.

“ Hey all: I have a few announcements to make. Things have come full circle, and’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for (pending DD etc.),” said Bankman-Fried on Twitter. 

Agreeing on Strategic Transaction

In his own thread on Twitter, Bankman-Fried confirmed the agreement, saying that the exchanges had reached a “strategic transaction,” and on Tuesday morning, the exchange suspended withdrawals due to a backlog.

“Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. — we apologize for that.”

Read More: US Announces Seizure Of $3.36B In Stolen Bitcoin! 

In his message, he expressed his gratitude to CZ, Binance, and all of their  supporters, saying “This is a user-centric development that benefits the entire industry. CZ has done, and will continue to do, an incredible job of building out the global crypto ecosystem, and creating a freer economic world.”

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Jamilatul Mahmudah

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