Binance to Acquire Its Rival, FTX
- FTX and Binance previously competed to purchase the assets of Voyager Digital. FTX later won the bid.
- Some experts have accused CZ of deliberately undermining FTX’s finances.
- The acquisition marks a huge fall from grace for Bannkman-Fried, who emerged as one of the key players in the industry.
Cryptocurrency exchange Binance has agreed to acquire its rival, FTX, a day after both companies were supposedly set to feud. Binance CEO Changpeng “CZ” Zhao announced in a tweet that Binance would liquidate its FTT holdings. Hours later, FTX CEO Sam Bankman-Fried took to Twitter to call for collaboration between both exchanges, quelling rumors of a conflict.
CZ appears to have consolidated his place as the leading figure in the crypto market after announcing the possibility of taking over the suddenly embattled FTX. CZ’s previous tweet seems to have caused a liquidity crunch in the exchange run by his former disciple and rival, Bankman-Fried.
The deal, if completed, will mark a stunning fall from grace for Bankman-Fried, who emerged as one of the standout figures in the crypto industry, often coming to the aid of bankrupt crypto firms. A Twitter thread posted by the FTX boss, Bankman-Fried, revealed that FTX had “come to an agreement on a strategic transaction” with Binance after the company attempted to clear out its withdrawal backlog.
Bankman-Fried confirmed that he had asked Binance for help to “clear out liquidity crunches” and cover assets on a 1:1 basis. SBF explained in his thread that the “important thing is that customers are protected.”
The FTX CEO had kind words for his rival, CZ, noting that he “has done, and will continue to do, an incredible job of building out the global crypto ecosystem and creating a freer economic world.”
“I know that there have been rumors in media of conflict between our two exchanges, however Binance has shown time and again that they are committed to a more decentralized global economy while working to improve industry relations with regulators. We are in the best of hands,” SBF tweeted.
Binance CEO CZ shared a statement on Twitter confirming that FTX had approached Binance for help. The crypto billionaire said that Binance was “assessing the situation in real time” and could “pull out from the deal at any time.” According to CZ, FTT is expected to be volatile in the coming days.
Some experts have accused CZ of deliberately undermining FTX’s finances, causing investors to panic. Although SBF issued a statement assuring users that things “were fine,” it appeared that the three-year-old exchange had taken a strong blow.
The acquisition will be a turning point in the crypto market. FTX and Binance have been at loggerheads for the most part. Binance has had several brushes with regulators, while Bankman-Fried has pushed for crypto regulation.