Earlier this week, cryptocurrencies were going through a rough patch when investors started moving their investments away from riskier assets due to high interest rates. Fortunately, Binance was able to find buyers in non-US competitor FTX and signed the deal Tuesday.
Two major cryptocurrency companies have joined forces to acquire FTX.com, with their founders reaching out to Binance after a crisis. Binance will perform due diligence in the coming days and will next step is to purchase FTX.com. Furthermore, Zhang noted that after three years of working together, his company made the decision after FTX reached out for help into the cryptocurrency titan. To make sure our users are well-protected, we’ve signed an agreement to purchase FTX for direct cash demonstration
In his tweet, he also said that we will conclude a comprehensive deal in the coming days. “Binance may terminate the agreement at any time.” In response, Bankman SBF stated: “It is important that customers are protected. Binance was the first to sponsor FTX, but as the fledgling company grew in popularity, the relationship between the two began to deteriorate. As Binance planned to acquire FTX within a few months, both sides made scathing comments to each other.
Finally, Zhau announced that Binance is selling its holdings in FTT. Which he received as part of his departure from the company last year. Zhau later confirmed that the company was selling its assets to FTT as a “post-exit risk management”. This is due to the spread of rumors about the financial condition of Alameda Research. Alameda and Bankman-Fried have previously dismissed similar concerns.
Not only that, Bankman Freed also created Alameda, a sales and marketing company. At least the company has something to do with FTT. According to Binance Trade Forecast, the FTT token fell to $14.32 from $25.47 on Tuesday as investors lost faith. Well-known research firm Berstein suggested that FTX close Alameda due to perceived risks.
Binance is a crypto giant, but at the same time, FTX should address its connection to Alameda. However, FTX is unable to maintain its relationship with Alameda. Therefore, FTX needs to ring-fence itself completely and potentially shut down the Alameda prop trading businesses. Alameda would face more downside if the decision will have worst impact on it, stated by Bernstein analyst in the note.
To retain customers’ trust, Bankman Fried, in his tweet, said that CZ has done, and will continue to do, an incredible job of building out the global crypto ecosystem and creating a more accessible economic world.
FTX is working on clearing the withdrawal blog; this will clear out liquidity crunches, whereas we will try to cover by 1:1. That is the main reason we asked Binance to come in. He stated that settling might take some time, and we apologize. Binance is the most powerful crypto exchange, worth more than $300 billion. Therefore, customers do not need to worry about their assets and investments.