Binance Abandons FTX Rescue Deal Amid Customer Fund Concerns
Binance cancels its planned acquisition of struggling crypto exchange FTX after due diligence reveals issues beyond its ability to fix. The sudden collapse of the rescue deal sends FTX's native token plunging.
Binance officially abandons its plan to acquire the struggling cryptocurrency exchange FTX. A spokesperson states that corporate due diligence, alongside news reports about mishandled customer funds and pending U.S. agency investigations, prompts the cancellation of the letter of intent.
The world's largest crypto exchange initially hopes to provide liquidity and support FTX's customers during a severe crunch. However, Binance concludes that FTX's problems are beyond its control or ability to help, leaving the troubled platform without a safety net just days after the rescue agreement emerges.
This sudden withdrawal caps a chaotic 36 hours for the crypto market, as the initial liquidity crisis stems partly from Binance's earlier announcement to sell its massive holdings of FTX's native token, FTT. Following the collapsed deal, the value of FTT drops an additional 32 percent to roughly $2.41.