NO RESCUE: Binance boss says FTX asked him for help due to ‘significant liquidity crisis’
The hope of rescue will have fizzled. The Binance cryptocurrency platform, which announced on Tuesday that it was considering buying FTX.com to help it out of serious difficulties, indicated on Wednesday that it was finally abandoning the transaction.
After conducting an audit of FTX’s operations, “we have decided not to proceed with the acquisition transaction,” Binance explained in a tweet. The company also mentions the appearance of press reports on the mismanagement of client funds by FTX and on investigations by US authorities.
The uncertain future of FTX
“At first, our hope was to be able to help FTX customers provide liquidity, but the issues are beyond our control or beyond our ability to help,” noted Binance, the largest virtual currency exchange.
The future of FTX.com is now uncertain. However, the platform was still considered a solid player in the sector until recently. Its founder, Sam Bankman-Fried, is a figure in the world of cryptocurrencies, and FTX had been valued, during its last fundraising in January, 32 billion dollars. But doubts have recently emerged about his accounts and his relationship with the Alameda cryptocurrency investment fund, also founded by Sam Bankman-Fried. The Alameda site was no longer accessible to the general public on Wednesday.
Binance boss Changpeng Zhao, saying FTX asked him for help due to a “significant liquidity crisis,” signed a letter of intent on Tuesday to buy FTX.com, which does not include the branch. American FTX.us. However, he also specified that he would conduct an audit for a few days, a usual procedure in merger-acquisition operations, before confirming his intention. “Every time a major player in an industry goes bankrupt, consumers suffer,” Binance pointed out on Wednesday, suggesting that FTX.com customers could suffer from the situation.