Thursday, December 8, 2022
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Binance cancels FTX takeover

The takeover of struggling crypto exchange FTX.com by rival Binance (PR42 profile) has fallen through.

“We have decided not to pursue the potential acquisition,” Binance announced on Twitter. The reason, it said, was media reports of misconduct in the handling of customer funds and alleged investigations by U.S. authorities.

Actually, the companies had announced that Binance wanted to take over most of FTX’s business. However, this was initially only a non-binding declaration of intent, as Binance CEO Changpeng Zhao immediately emphasized. After the audit began, Binance quickly backed away from the takeover plan. Zhao plays an obscure role in the back and forth. On Sunday, he himself had reinforced doubts about FTX’s cash reserves with a tweet and fueled the flight of customers there.

What happens next for FTX’s customers is unclear. Bankman-Fried assured on Tuesday that all deposits were protected and would be paid out in full. But that seems increasingly uncertain. Bankman-Fried had also maintained until the escalation of the situation that there was no cause for concern and dismissed rumors of a cash shortage as false.

Bitcoin, the largest and oldest digital currency, fell below $16,000 at times on Wednesday – its lowest level in more than two years – according to data from analyst firm Coinmarketcap. Since its all-time high in November last year, when bitcoin was trading just above $68,000, the currency has lost more than three-quarters of its value. The cyber currency is currently trading at around 16,500 dollars.

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