FTX Agrees to Sell Itself to Rival Binance Amid Liquidity Scare at Crypto Exchange
Binance agreed to buy FTX amid a panic that caused concern FTX's cryptocurrency exchange might not survive.
"Things have come full circle, and FTX.com’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for FTX.com (pending DD etc.)," FTX's Sam Bankman-Fried tweeted Tuesday.
1) Hey all: I have a few announcements to make.— SBF (@SBF_FTX) November 8, 2022
Things have come full circle, and https://t.co/DWPOotRHcX’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for https://t.co/DWPOotRHcX (pending DD etc.).
Binance CEO Changpeng "CZ" Zhao also took to Twitter to confirm the deal, saying the two exchange giants signed a non-binding letter of intent. Bankman-Fried and Zhao both said that a full due diligence process would be underway in the next couple of days.
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 https://t.co/BGtFlCmLXB and help cover the liquidity crunch. We will be conducting a full DD in the coming days.— CZ 🔶 Binance (@cz_binance) November 8, 2022
The deal comes in the wake of a CoinDesk scoop last week that triggered concern that the balance sheet of FTX's corporate sibling, Alameda Research, was too heavily reliant on illiquid tokens including FTX's own FTT.
On the news, FTX's FTT token rallied 20% to $17.50 from about $14.50. Binance's BNB token jumped 8% from $326 to $355.