The world’s largest crypto exchange by volume, Binance, said it would walk away from a deal with the third largest crypto exchange by volume, FTX.
On Tuesday, Binance signed a letter of intent to buy its troubled competitor, FTX, in what appeared to be a possible rescue of the latter amid a liquidity crisis. But just over 24 hours later, that plan crumbled.
Binance withdrew after reviewing the company’s structure and books, it said in a statement to the Wall Street Journal. “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,” Binance said.
“As a result of a corporate investigation, as well as the latest news of mishandling client funds and alleged investigations by US agencies, we have decided that we will not discuss the potential acquisition of [FTX]”binance” said in a tweet.
“Every time a major player in an industry fails, retail consumers will suffer,” says Binance continued. “We have seen the crypto ecosystem become more resilient in recent years and we believe in time that outliers that misuse user funds will be wiped out by the free market.”
Binance and FTX did not immediately respond to TBEN requests for comment.
Earlier today, sources familiar with the CoinDesk case said FTX’s loan commitments raised concerns at Binance’s top executives. The report follows Binance CEO Changpeng Zhao who tweeted that FTX is “not good for everyone in the industry.”
This is an evolving story and may be updated as new information emerges.