Thursday, December 8, 2022

Binance Signs Letter of Intent to Acquire Sam Bankman-Fried FTX

The crypto industry has been in a massive shake-up following harsh market conditions and the prevalent recession, and now it seems to be getting thicker by the day. In recent times, Sam Bankman-Fried cryptocurrency exchange FTX has been taking the position of a ‘savior’ for many distraught crypto firms, offering to buy them off in order to restore stability.

 

The tables have turned, and cryptocurrency exchange FTX which announced future plans to launch a stablecoin needs saving at present. Chief Executive Officer of Binance Changpeng Zhao announced his intention to acquire FTX exchange to ‘help cover the liquidity crunch’. A letter of intent has been signed in effect and is only awaiting due diligence from both crypto exchanges.

 

Binance Plans to Liquidate its FTX Token Holdings

This happened after Binance declared its plan to liquidate its FTX token (FTT) holdings as a “post-exit risk management.” A decision that followed recent rumors about Alameda Research’s leaked balance sheet which had certain discrepancies like debt from loans. 

FTX Sam Bankman-Fried wasted no time in issuing a notice to alert the public of its stable relationship with Binance. Specifically, he stated that there were no conflicts between the two firms though it seems like their relationship has withered. 

“I know that there have been rumors in media of conflict between our two exchanges, however, Binance has shown time and again that they are committed to a more decentralized global economy while working to improve industry relations with regulators. We are in the best of hands,” FTX CEO said

 

Concerning the acquisition, Bankman-Fried who asked for help from Binance said that the deal is to protect the exchanges’ customers. Important to realize is that he emphasizes it is a “user-centric development that benefits the entire industry.”  “CZ has done and will continue to do, an incredible job of building out the global crypto ecosystem, and creating a freer economic world,” Bankman-Fried tweeted.

As of today, FTX is the latest cryptocurrency exchange that has succumbed to the prevalent extreme market conditions. Many crypto firms have folded up while some of them are in the process of completing their acquisition process. A few of the affected firms so far are Celsius Network, Three Arrows Capital, and crypto mining data center Compute North.

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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