Binance to acquire now-bankrupt FTX
In Brief
With FTX's recent bankruptcy, Binance is looking to step in and take over operations.
The current price of $FTT is $4.45
Binance, the largest player in cryptocurrency, has agreed to a non-binding letter of intent to acquire FTX, which has fallen into bankruptcy. During the weekend of November 5-6, the trading volume for FTX’s native coin, $FTT, began to decline sharply; this coin was being used as collateral for a hefty loan.
FTX's CEO, Sam Bankman-Fried, reassures customers that their funds remain safe. claimed \"Our teams are actively engaged in addressing the current withdrawal backlog. This effort aims to resolve liquidity issues; every asset will be fully backed 1:1. This situation has prompted our request for Binance's assistance. We appreciate your patience as we work through this situation.\"
Reports indicate that FTX may have improperly utilized customer funds for leveraged trading, resulting in significant losses attributed to poor decision-making. Moreover, these funds were allocated to initiatives like launching an NFT marketplace, establishing the FTX Ventures investment fund, securing esports sponsorships, and developing a gaming sector. It's worth noting that many of these efforts, including the marketplace, were primarily handled by the US branch of FTX, and thus won't be included in Binance's acquisition.
On November 8, Binance's CEO, Changpeng Zhao, made a statement regarding FTX's request for assistance, highlighting a significant liquidity issue.
The acquisition is still under negotiation, and CZ has the final say on whether to proceed. The company is conducting due diligence and is expected to reveal its decision in the coming days. tweeted :
The recent fallout has had a profound impact on the broader cryptocurrency landscape. On November 8, $FTT plummeted to a low of $3.15, though it has since climbed to $4.45 at the time of writing. FTX also holds over 56 million shares of Robinhood, leading to a 20% drop in Robinhood's stock value. Bitcoin also saw a decline, reaching a low of $17,800, a point it hadn't seen since November 2020. Overall, the market turmoil experienced on November 8 resulted in approximately $717 million in trader losses, marking the highest liquidation figure recorded in a single event.
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In line with the Trust Project guidelines With a Master’s degree in Public Communications and currently pursuing a second major in International Business Management, Valeria spends her free time immersed in photography and fashion styling. At just 13, she launched her first blog centered on fashion, which ignited her passion for journalism and style.
