Binance Set to Abandon FTX Rescue Deal After Reviewing Finances
Cryptocurrency exchange Binance strongly considers abandoning its planned acquisition of FTX after a brief review reveals severe financial issues. This potential withdrawal adds another shocking twist to the rapid collapse of Sam Bankman-Fried's crypto empire.
Cryptocurrency exchange giant Binance strongly leans toward abandoning its proposed rescue takeover of struggling rival FTX after a brief review of the company's financial books. The nonbinding agreement announced just a day prior hinges entirely on Binance completing its due diligence process, which reveals alarming internal data and massive loan commitments.
This potential withdrawal causes immediate turmoil across global financial markets as bitcoin drops to its 2022 low of around $17,100 and ether falls to $1,160. The broader CoinDesk Market Index declines by 5.2 percent, while the S&P 500 also drops to its daily low as investors react to the worsening crypto contagion.
Backing out of this deal marks yet another stunning development in a chaotic week for Sam Bankman-Fried's crypto empire. The current crisis originates from a CoinDesk report about the balance sheet of Alameda Research, FTX's corporate sibling, which triggers a liquidity crunch that Binance CEO Changpeng Zhao exacerbates by announcing his plan to sell his massive FTT holdings.