Binance has signed a non-binding letter of intent to acquire FTX, the two companies announced, adding a surprising twist to the public feud between the world’s two largest crypto exchanges, which contributed to a drop in the value of several tokens on Tuesday. Until the due diligence process is completed, the firms will not disclose the deal’s value.
Binance founder and CEO Changpeng Zhao stated in a series of tweets that the company made the decision after FTX approached the company for assistance. “To protect users, we signed a non-binding LOI with the intention of fully acquiring FTX and assisting with the liquidity crunch.” “In the coming days, we will conduct a full DD,” he said.
Binance, the world’s largest exchange, was the first to back FTX, but as the younger firm grew in popularity, the relationship between the two began to deteriorate. For several months, the two executives have slammed each other, but their relationship reached an all-time low earlier this week when Zhao revealed that Binance was selling its holding of FTT, the native token of FTX exchange that it received as part of an exit from the firm last year.
Sam Bankman-Fried (pictured above) said in a tweet on Tuesday: “A huge thank you to CZ, Binance, and all of our supporters.” This is a user-focused development that will benefit the entire industry. CZ has done and will continue to do an incredible job of expanding the global crypto ecosystem and fostering a more free economic environment.”
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According to Bankman-Fried, FTX is working to clear the withdrawal backlog. “This will alleviate liquidity constraints; all assets will be covered 1:1.” This is one of the primary reasons we asked Binance to join us. “It may take some time to settle, etc. — we apologize,” he said.
