Binance Acquires FTX Following Solvency Crisis
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Official sources have confirmed that Binance has made an offer to purchase FTX.com for an unknown amount, and following some due diligence procedures, it will formally possess one of its largest exchange rivals.
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 🔶 Binance (@cz_binance) November 8, 2022
FTX contacted Binance for assistance when faced with a liquidity crisis, according to tweets from Changpeng Zhao and Sam Bankman-Fried on Tuesday. The fact that Zhao probably started the problem when he declared Binance will sell $2.1 billion worth of FTT because of “revelations that have come to light” over the weekend was left out of the discussion.
FTT fell after transferring over $600 million worth of the token to the Binance exchange and announcing the liquidation. It temporarily rose once it was revealed that Binance had acquired it before falling much more. Zhao informed investors that he anticipates FTT to be very volatile over the next few days.
How Binance CEO CZ Plotted a Cunning Takeover
Sam Bankman-Fried’s name was practically unknown a few years ago, even among those working in the digital currency sector. But today, practically everyone is aware of his identity.
As popularly referred to as “SBF,” he emerged from nowhere to transform FTX into a digital superpower, at one point purchasing a sizeable share in Robinhood and announcing intentions to develop cutting-edge tools that would revolutionize stock trading.
Those hopes are now in ruins as Bankman-Fried transfers ownership of FTX.com to his adversary. Binance was the original investor in FTX, but Bankman-Fried had grown uneasy about his connections to Zhao’s shadowy business, which finally led to Binance selling its stake for $2.1 billion in stablecoin BUSD and the native FTX token FTT.
Zhao appears to have waited in the tall grass to exact his vengeance by selling a large amount of FTT at a time when FTX was weak, which caused the enterprises’ liquidity problems and his consolidation of control.
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