The world’s largest crypto exchange Binance has signed a non-binding agreement to acquire major rival FTX as it looks to help the latter solve its liquidity crisis.
Binance CEO, Changpeng Zhao (CZ) announced the news via a tweet on Tuesday, saying that both exchanges have signed a non-binding letter of intent (LOI) on the possible acquisition.
“To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch,” CZ said.
Binance to Conduct Due Diligence in Coming Days
The financial terms of the deal were not disclosed. CZ noted that Binance can still pull out from the deal at any time. The Binance CEO also stated that the company will be carrying out full due diligence in the coming days.
FTX CEO, Sam Bankman-Fried (SBF) also commented on the possible deal, saying that things have come “full circle” and that Binance would be FTX’s first and last investor.
SBF further stated that the bailout is a “user-centric development” that will benefit the entire crypto space.
“CZ has done, and will continue to do, an incredible job of building out the global crypto ecosystem and creating a freer economic world,” he added.
FTT rose more than 20% on the news while Binance native token BNB surged by 12% and was trading at $379 at the time of writing.
The latest news follows an increase in withdrawals on the FTX platform that was triggered when Binance announced it will sell all of its FTT holdings. CZ noted that Binance’s decision to sell its FTT holdings was due to “recent revelations” that have come to light. FTT is the native token of the FTX exchange.
Turn of Events
The latest announcement comes as a shock to the crypto community, with many witnessing FTX bailing out several struggling crypto firms in recent months. FTX has even been referred to as the crypto white knight by many.
Just last month, U.S. Bankruptcy Court Judge Michael Wiles approved bankrupt crypto lender Voyager Digital’s plan to sell its assets to FTX at approximately $1.4 billion.
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