‘Beyond our ability to help’
One day after Binance crypto exchange announced its intentions to acquire a competitor’s FTX for an undisclosed amount, the company withdrew from the deal.
“Our hope was to be able to assist FTX customers to provide liquidity, but issues are beyond our control or ability to help,” Binance said in a statement, which was released by the company. first reported by The Wall Street Journal and tweeted a few minutes later.
When Binance CEO Changpeng Zhao announced the deal on Tuesday, he warned that it would be pending until due diligence was complete.
In a letter sent to Binance employees Wednesday morning — and shared on Twitter — Zhao emphasized that the deal has not yet been finalized. Meanwhile, he Ask Binance staff not to trade FTTnative utility tokens are used to get a discount on transaction fees on FTX.
“Shortly after I ended my call with SBF yesterday, I asked our team to stop selling as an organization,” he wrote. “Yes, we have a bag. But do not worry. More importantly, we need to hold ourselves to a higher standard than even in banks. “
The FTT token fell to a low of $2.57 in the past day despite experiencing a brief spike shortly after news of the pending transaction, according to CoinGecko data. Meanwhile, Binance Coin (BNB), a partner of FTT on the Binance exchange, rose 10% to $368.07 on news of the pending transaction. By Wednesday afternoon, BNB was trading at $288.91, down 20% from the previous day.
In the past day, a handful of companies have far from FTXconsists of Crypto.com, Tether, Coinbaseand Genesis.
If the deal is successful, it will combine the two largest centralized cryptocurrency exchanges in the industry. As of Wednesday, Binance accounted for $49 billion and FTX with $4 billion worth of trading volume over the past day — or about a quarter of total crypto trading volume, according to Coingecko.
The relationship between the two CEOs and their respective companies began many years ago.
Binance was an early investor in FTX in 2019. But last July, Binance faced increasing pressure from regulators and FTX. bought shares of Binance. “I think there are some differences between the way we run our business,” Bankman-Fried told Decryption at that time.
Meanwhile, Zhao told Forbes Binance’s divestment of equity in FTX as part of a “normal investment cycle” ended amicably. “We are still friends but we are no longer fair in the relationship,” he said.
Zhao’s explanation of the same relationship resurfaced on Sunday on Twitter Why Binance, after leaving its position last year, decided to liquidate its FTT. This time, the tone is more combative.
“We’ve been supportive before, but we won’t pretend to love each other after our divorce,” he wrote. “We are not against anyone. But we will not support those lobbying against other industry companies behind their backs.”
On-chain data shows that Binance transferred $584 million worth of FTT on Saturday as part of a plan to liquidate its holdings.
That caused the price of FTT to plunge. Within days, Bankman-Fried and his team insisted that everything was fine. Then on Tuesday, Zhao and Bankman-Fried shocked the industry when they announced plans to acquire Binance’s FTX.