After less than a day of assessing the company, cryptocurrency exchange Binance is reportedly “very unlikely” to proceed with its proposed acquisition of struggling rival FTX.
Due diligence was a condition of Binance’s non-binding letter of intent for the acquisition, which was made public on Tuesday as FTX’s financial situation appeared to be spiraling out of hand.
After evaluating FTX’s internal data and loan agreements for around half a day, Binance has decided strongly not to complete the deal, Coindesk reported Wednesday, citing an anonymous source.
Benzinga has reached out to Binance and its CEO Changpeng Zhao for comment.
The apparent fallout of the FTX acquisition deal sent the cryptocurrency market spiraling, with Bitcoin BTC/USD down 12% and breaking the $17,000 mark for the first time since November 2020.
Crypto Market Crumbles
Other major cryptocurrencies are plunging: Ethereum ETH/USD is down 20%. Binance BNB/USD is down 10%, and Ripple XRP/USD, Cardano ADA/USD and Solana SOL/USD are down 16%, 10% and 40%, respectively.
FTX came under fire after a CoinDesk report published last week revealed the native FTT tokens of FTX were in abundance on the balance sheet of Alameda Research, a cryptocurrency trading business managed by Bankman-Fried, who also owns FTX.
This meant that rather than relying on a standalone asset like fiat money or another cryptocurrency, Alameda was built mostly on a coin that a sister firm created.
Industry participants sold FTX-linked coins as a result of the report that FTX would become insolvent in order to limit their own potential losses.
Competitor Binance, which had more than $500 million worth of FTT on its books, began to sell off its holdings, which led to a 24-hour drama that finished with Binance signing a nonbinding agreement to buy FTX, which is now widely seen as being insolvent.
Binance Was The Last Option For FTX
Wednesday’s Coindesk further said that after FTX requested assistance from and was rejected by other significant exchanges Coinbase and OKX.
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