BREAKING: Binance Backs Out of FTX Deal
The cryptocurrency exchange is backing out of its deal to save troubled competitor FTX - which may have some impact on the investors.
The cryptocurrency exchange is backing out on its deal to save troubled competitor FTX – which may have a huge impact on the investors, who had high hopes that the agreement between the two companies would help them get back their investments after the collapse of FTX earlier this week.
Why is Binance getting cold feet?
Binance stated that the decision is based on “corporate due diligence”. The fallout from this situation could expose FTX’s customer assets to risk. This implosion is quite an astounding one since the company was recently known for being one of the safe havens of the volatile crypto world.
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) November 9, 2022
The troubles of Sam Bankman-Fried (FTX’s CEO) are just getting started. The 30-year-old entrepreneur has gained quite a reputation over the past few years and was considered one of the most reliable figures in the space.
He turned FTX into a 32-billion-dollar company. He also spent hundreds of millions by supporting political campaigns (being one of Joe Biden’s top campaign donors)
The collapse of an empire
His empire’s collapse was a severe hit to the crypto market. On Tuesday, SBF suddenly announced that he plans to sell his company to Binance. CZ’s company however said that they are backing off from the deal, because of FTX’s faulty management system of customer funds and unconfirmed investigations by US regulators.
“Every time a major player in an industry fails, retail consumers will suffer,” Binance said in a statement.
“Over the past few years, we’ve seen the crypto ecosystem become increasingly resilient, and we believe that over time, the outliers that abuse consumers’ funds will be removed from the free market.”
FTX declined to comment on Binance’s withdrawal from the deal.