Technology

Binance FTX Deal Called Off: Know Why & What happens Next?

FTX and Binance drama that has engulfed the crypto worse in the last few days has just gotten worse. In this article, we cover what developments took place between FTX and Binance.

A brief history of the situation

November 2, CoinDesk issued a report on the leaked balance sheet of Alameda Research (FTX’s sister company) and revealed that Alameda’s assets were based majorly on FTT and other tokens related to SBF (CEO of Alameda). On November 6, CZ, Binance’s CEO announced that they will be dumping all their FTT Tokens which were worth five hundred million dollars.

Binance to buy FTX?

On November 8, SBF took to Twitter and announce that he would be selling FTX to Binance in the face of the liquidity scare. CZ also confirmed the deal and said that in order to safeguard the users they will be signing a non-binding LOI in a move to completely acquire FTX.

He also clarified that “Binance has the discretion to pull out from the deal at any time” and that they “expect FTT to be highly volatile in the coming days as things develop”.

Binance FTX Deal Called Off: What went wrong with the deal?

A Binance spokesperson informed that Binance has decided to back away from the deal and discard the letter of intent. After looking into the books diligently and assessing several reports of alleged mishandling of customer funds and the future investigations into the company, Binance’s spokesperson said they will not go ahead with the acquisition of FTX.

They mentioned that even though the intent was to help, the issues at hand are beyond repair for Binance.

What were the consequences?

In a domino effect initially, it was reported that SBF was wiped off 94% of his wealth and was no longer a billionaire.

Now there is also a warning of potential bankruptcy. The FTX website also shows an outage and issues a message saying “FTX is currently unable to process withdrawals.

We strongly advise against depositing”. The crypto market has been taken by storm and prices are plummeting.

After the failed deal, SBF has now announced that their first priority right now is to raise funds. Their aim is to collect funds into FTX in order to be able to do right by the users and then the investors.

Read more about how the FTX-Binance situation has impacted the market 31M+ SOL to be Unstaked Today: Will SOL Collapse?

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