Binance, one of the largest and most liquid cryptocurrency exchanges in the world, has signed a non-binding LOI to fully acquire FTX.com. This comes after large volatility on the FTT digital asset based on a recent report released by CoinDesk in which they reported that a large portion of Alameda’s balance sheet was made of FTT.
Binance Signs LOI to Fully Acquire FTX.com
In a recent Tweet, Binance CEO, Changpeng Zhao, announced that they have signed a non-binding LOI to protect users with the intention to fully acquire the crypto exchange FTX. In the official tweet, Changpeng Zhao explained that there are many things to cover in the agreement, something that can make the negotiation process even longer.
“This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire http://FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days.”
In recent days, FTT, the virtual currency of the FTX cryptocurrency exchange moved from $26 per coin to under $15 a few hours ago. This represents a loss of 42% in just 7 days, making FTT one of the worst-performing digital currencies in the market.
According to the founder and CEO of FTX, Sam Bankman-Fried, they have come to an agreement on a strategic transaction with Binance for FTX.com. Moreover, he mentioned that FTX and Binance are working on clearing out the withdrawal backlog as is. As he explained, this will help clear out liquidity crunches and assured that all assets will be covered 1:1.
Just yesterday, on November 7, Sam Bankman-Fried wrote on Twitter that he would love to work together alongside Changpeng Zhao to improve the whole crypto ecosystem. It seems that Binance heard that and they decided to move forward with the LOI.
In recent minutes, FTT moved even lower after the announcement made by Changpeng Zhao and the CEO of the FTX exchange. This shows that the market is trying to press both Binance and FTX towards an extreme situation. Nevertheless, customers remain protected as explained by Sam Bankman-Fried on Twitter.
Changpeng Zhao has also mentioned that there is going to be high volatility in the market in the coming days as things develop. Therefore, we could see FTT moving lower and even higher from current prices. The question that many analyst are doing is related to how low FTX could move in the coming days and weeks.
On Twitter SBF commented about the relationship between Binance and the FTX exchange:
“I know that there have been rumors in media of conflict between our two exchanges, however, Binance has shown time and again that they are committed to a more decentralized global economy while working to improve industry relations with regulators. We are in the best of hands.”
It will be a matter of time to see whether Binance is able to solve the current liquidity issue that the FTX exchange is currently experiencing.