Crypto Exchange Binance Buys Competitor FTX

Billionaire Sam Bankman-Fried is forced to sell one of the largest crypto exchanges in the world – FTX – due to a sudden liquidity crisis.  The biggest competitor, the Binance exchange, agreed to save it from collapse.

Its CEO, Changpeng Zhao (CZ), took to Twitter on Tuesday that, in response to a request from FTX, Binance has signed a letter of intent that provides for a buyout of the exchange after due diligence.

Binance reserves the right to withdraw from a transaction at any time.

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 🔶 BNB (@cz_binance) November 8, 2022

FTX’s problems began after the head of Binance himself accused his competitor of fraud with FTT tokens, which were issued by FTX itself. Following Binance began to sell these tokens and many others followed suit, bringing down the price of the asset from $22 to $14.2 this afternoon. After that, users began to withdraw any funds at all from FTX – over the past three days they have withdrawn more than $6 billion, thus the company faced a lack of liquidity. The company suspended user withdrawals and was forced to request assistance from Binance.