FTX Close to Bankruptcy As Binance Withdraws Take Over Deal

According to a Binance statement made on Wednesday, the company has canceled its letter of intent to acquire competitor crypto exchange FTX.

Binance’s withdrawal of its offer capped a frantic day and a half in which the world’s largest crypto exchange by volume agreed to bail out its troubled rival in the face of a liquidity crunch caused, in part, by Binance’s announcement that it would sell all of its holdings of FTX’s exchange token FTT.

In the statement, Binance detailed:

“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com.”

“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help. Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.

“As regulatory frameworks are developed and as the industry continues to evolve toward greater decentralization, the ecosystem will grow stronger.”

FTT, which had already taken a huge hit in recent days, fell another 30% to around $2.41 when Binance announced its withdrawal from the letter of intention to acquire FTX.