Less than 48h after announcing plans to give a helping hand to its rival FTX, Binance is walking away from the acquisition deal.
Binance, the largest crypto exchange in terms of daily trading volumes, is pulling out from Bahamas-based crypto exchange FTX acquisition plans.
According to the tweet shared by the official Binance account, the company decided to walk away from the deal after conducting “corporate due diligence.” Moreover, Binance added that the decision to scrap the deal was influenced by the “latest news reports regarding mishandled customer funds and alleged US agency investigations.”
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It can be assumed that Binance is citing a recent Bloomberg report claiming that the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have launched an investigation on FTX.
It appears that SEC and CFTC aim to ascertain FTX's ties with FTX US and Alameda Research. In addition, the commissions seek to determine whether FTX mismanaged its funds.
Binance added that it initially hoped to provide liquidity for FTX’s customers. However, the company believes that issues are beyond Binance’s “control or ability to help.” The company noted:
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.
Binance ended its Twitter thread stating that it hopes that authorities will develop specialized regulatory frameworks, allowing the industry to grow and “evolve toward greater decentralization.”
In response to his company’s tweets, Binance founder and CEO Changpeng Zhao shared a tweet stating:
FTX CEO Sam Bankman-Fried is yet to issue a comment regarding the matter.
At the time of writing, FTX native token, FTT, retails for $2.67, recording a 45.19% price drop in the last 24 hours.
