Binance to buy rival FTX as crypto market crumbles

Crypto goliath Binance signed a nonbinding agreement to buy FTX’s non-US unit to help cover a liquidity crisis, in a spectacular bailout that raised fresh fears among investors about cryptocurrencies.

The deal between high-profile rivals Changpeng Zhao, Binance’s CEO, and FTX CEO Sam Bankman-Fried came as speculation about FTX’s financial health snowballed into $6 billion of withdrawals in the 72 hours prior to Tuesday morning.

The pressure on FTX came in part from Zhao, who tweeted that Binance would liquidate its assets of the rival’s token due to unspecified recent revelations.

Dan Raju, Tradier’s CEO, financial services provider, and brokerage, said it was scary to think that FTX, which is one of the world’s largest crypto exchanges, was bitten by a liquidity crisis and Binance, their biggest rival, was coming to their rescue.

The deal was a dramatic reversal in the fortunes of billionaire Bankman-Fried and was the latest emergency rescue in the cryptocurrency world this year, as investors pulled out from riskier assets amid rising interest rates. The cryptocurrency market has fallen by nearly two-thirds from its peak valuation to $1.07 trillion currently.

The crypto exchanges did not disclose the terms of the deal, and it remains to be seen whether the deal will close.

Binance, the world’s most significant crypto exchange, will conduct due diligence in the coming days as the next step toward the acquisition of FTX.com.