Binance Backs Out of the FTX Deal

In a sad turn of events, Binance, the world’s largest exchange by trading volume, announced today, Nov. 9, with a  series of tweets that the company would no longer be acquiring an endangered FTX. This news has met the crypto community with FUD. At the time of writing this, bitcoin, the flagship cryptocurrency, has fallen under $16,000; this is the first time it has hit lows like this since November 2020.

Summary

• Binance announced on Twitter that it would no longer be acquiring FTX.
• This news has met the crypto community with FUD.
• Bitcoin falls below $16,000.

FTX in Deep waters as Binance Backs Out Of a Mega Deal

Earlier today, Binance took to its Twitter account to let the crypto community and the whole world know with a series of tweets it would be backing out of the much-anticipated acquisition of its rival exchange, FTX. The world’s largest exchange cited the “latest news reports regarding mishandling of customer funds and alleged US agency investigations” as major reasons for not pursuing the potential acquisition of FTX.com.

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 https://t.co/FQ3MIG381f.

— Binance (@binance) November 9, 2022

Binance also stated, “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.”

This decision by Binance has met a lot of reactions from the crypto community, and there are possible signs that bitcoin might fall further from where it is currently trading.

FTX CEO Sam Bankman-Fried has been taken aback by this new development and says the company is most likely to go bankrupt without more capital.

JUST IN: FTX CEO Sam Bankman-Fried says without more capital, bankruptcy is likely.

— Watcher.Guru (@WatcherGuru) November 9, 2022

Currently, FTX cannot process withdrawals and onboard new clients, as seen on their homepage.

JUST IN: FTX․com suspends all onboarding of new clients and warns users against depositing. pic.twitter.com/zmRKmC8Ly3

— Watcher.Guru (@WatcherGuru) November 9, 2022

CZ also expressed his sadness about the situation but admitted that he tried and nothing could have been done to mitigate the situation.

Sad day. Tried, but 😭

— CZ 🔶 Binance (@cz_binance) November 9, 2022

Crypto Market Cap Falls Below $1 Trillion

Data gathered from Coinglass shows that over $200 billion has been liquidated from the global cryptocurrency market in the past 48 hours. Investors do not want a repeat of the Terra-Luna showdown and are trying to save themselves from the situation before things spiral out of control. Bitcoin has also fallen under $16,000 for the first time since November 2020.

Bottom Line

The FTX saga and Binance backing out of the FTX acquisition deal show that there is much to understand in the crypto space. With FTX currently in deep waters and CEO Bankman-Fried losing about 94% of his net worth, only time will tell if the company can be salvaged or if it will eventually sink into bankruptcy.