FTX Acquisition Withdrawal Announced by Binance
FTX was set to be acquired by Binance, but this morning, Binance declared its decision to withdraw from the planned deal, as stated in a tweet on Thursday.
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) November 9, 2022
According to the tweet, “Initially, our intention was to assist FTX’s customers by providing liquidity, but the issues are beyond our control or ability to aid.”
“Whenever a major player in an industry faces setbacks, it’s the retail consumers who suffer. Over the past few years, the crypto ecosystem has shown increasing resilience, and we believe that entities misusing user funds will eventually be eliminated by the free market.”
Evidently, Binance and CZ were dissatisfied with what was revealed in FTX’s records and their behind-the-scenes actions.
Reports of concerns regarding FTX’s financial stability led to $6 billion in withdrawals within just three days.
Earlier this week, the industry became aware of FTX facing a liquidity crisis as various conspiracies and theories emerged. We covered the initial stages of the “exchange war” in an article that can be accessed here.
What followed was Sam Bankman-Fried (SBF), FTX’s founder, scrambling to gather funds from different sources before approaching Binance. We also covered Binance’s initial signing of a non-binding LOI in an article available here.
Bankman-Fried informed investors that the company faces a potential shortfall of up to $8 billion due to withdrawal requests and urgently requires additional funding, reported the Wall Street Journal.
One of Silicon Valley’s leading VC firms, Sequoia Capital, invested $210 million in the company, as reported by journalist Eric Newcomer.
The situation is currently unfolding, revealing increasingly distressing details.
Adding to the pressure, the SEC and other regulators are intensifying scrutiny of the industry due to growing concerns about the trading activities of crypto platforms.
As a consequence of this recent development, cryptocurrencies across the market have plunged. BTC has decreased by 10% in the last 24 hours as of the current writing and has plummeted by almost 40% since reaching its high, trading just above $16k/USD.
It’s presently unclear if any other entity is considering stepping in to acquire the troubled cryptocurrency exchange.
Hopefully, this marks the conclusion of what could be considered the most shocking black swan event in cryptocurrency history.
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