Binance backs out of deal to buy FTX, cryptos at record low

World’s largest crypto exchange Binance on Thursday took a U-turn on acquiring its rival FTX, saying it was backing out of the deal after reviewing the company’s finances, leading to further fall in major cryptocurrencies.

Binance on Tuesday signed a non-binding, letter of intent to purchase FTX for an undisclosed sum.

In a tweet, the company said that as a result of corporate due diligence, “as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX”.

“Every time a major player in an industry fails, retail consumers will suffer,” Binance said.

“We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market,” it added.

CoinDesk reported that FTX’s loan commitments raised concerns among Binance’s top bosses.

The company said in another tweet that in the beginning, “our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help”.

Earlier, Binance founder and CEO Changpeng Zhao (CZ) said that FTX asked for their help.

Meanwhile, cryptocurrencies further tumbled after Binance said it was pulling out of a deal.

Bitcoin was trading more than 10 per cent lower at $16,287, after plunging to $15,800 level — its lowest level since November 2020.

The second largest cryptocurrency Ethereum also nosedived by more than 10 per cent to $1,166.

The global crypto market cap slipped below the $1 trillion mark.

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