Binance to acquire rival FTX

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FTX CEO Sam Bankman-Fried (left) and Changpeng Zhao, Binance CEO

Two days after announcing the sale of its entire portfolio of FTT tokens of cryptocurrency exchange FTX, Binance CEO Changpeng Zhao (CZ) on November 8 said it has signed a non-binding letter of intent, planning to fully acquire FTX.

Due diligence for the same will be conducted in the coming days.

“Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. — we apologize for that,” FTX founder and CEO Samuel Bankman-Fried (SBF) said in a series of tweets.

“But the important thing is that customers are protected,” he added.

FTX’s token FTT started to plummet from November 6, following a public spat between CZ and SBF.

CZ tweeted on November 6, saying “As a part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have come to light, we have decided to liquidate any remaining FTT on our books.”

This happened after a Coindesk report that was published a few days ago. According to the report, FTX’s trading arm, Alameda, had $14.6 billion in assets. Turns out most of these assets on the balance sheet were FTX’s own FTT tokens.

Founded by SBF three years ago, FTX quickly rose to become one of the biggest cryptocurrency exchanges in the world. Its revenue soared more than 1,000 percent in 2021 to $1.02 billion from $89 million in the previous year, according to a CNBC report.

FTX is backed by marquee investors including Temasek, SoftBank’s Vision Fund 2 and Tiger Global.As of September this year, the cryptocurrency exchange was in talks to raise up to $1 billion at a valuation of about $32 billion.

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