A PYMNTS Company

Binance To Acquire Rival FTX

 |  November 8, 2022

Cryptocurrency exchange Binance is set to acquire rival FTX, the heads of the companies announced on Twitter Tuesday (Nov. 8) in the wake of a public clash between the firms.

“This afternoon, FTX asked for our help,” tweeted Binance CEO Changpeng Zhao. “There is a significant liquidity crunch.”

To protect users, Zhao added, Binance signed a non-binding letter of intent to acquire FTX and cover that crunch. He said the company would conduct full due diligence in the days ahead.

“Our teams are working on clearing out the withdrawal backlog as is,” tweeted FTX CEO Sam Bankman-Fried. “This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. — we apologize for that. But the important thing is that customers are protected.”

Related: Binance Says It Was ‘Fully Compliant’ With US Sanctions

The announcement came one day after Bankman-Fried said FTX had enough to cover all client holdings and was processing all withdrawals, as PYMNTS reported.

His comments were in response to an announcement by Binance — the largest crypto trading platform by volume — that it would start liquidating its holdings of FTX’s FTT token.

“A competitor is trying to go after us with false rumors,” Bankman-Fried said on Twitter. “FTX is fine. Assets are fine.”

This followed a public spat between Zhao and Caroline Ellison, CEO of the FTX sister company Alameda Research.

CoinDesk reported last week that the balance sheet of trading firm Alameda Research was “full of” the FTT token and that while there was nothing wrong with that, it indicated the trading firm was largely based on its sister company’s token. Zhao said four days later that Binance would liquidate its holdings of FTT.

“Due to recent revelations that have come to light, we have decided to liquidate any remaining on our books,” Zhao tweeted Nov. 6.

That same day, Ellison posted a tweet that mentioned Zhao: “If you’re looking to minimize the market impact on your FTT sales, Alameda will happily buy it all from you today at $22!”