Binance has signed a non-binding letter of intent to acquire FTX. The acquisition would see the two largest cryptocurrency exchanges by trading volume operate under the same umbrella.
The exchanges confirmed the surprising twist after several controversial decisions and social media spats that contributed to Tuesday’s tumble of several tokens. However, both parties did not disclose the deal’s value, pending the due diligence process.
In a series of tweets, Changpeng Zhao said Binance decided to acquire FTX after the latter reached out to the firm for help.
“To protect users, we signed a non-binding LOI, intending to fully acquire FTX and help cover the liquidity crunch. We will be conducting a full DD in the coming days.”Binance founder and chief executive Changpeng Zhao
Binance vs FTX feud
Zhao was the first investor that backed FTX. As part of their strategic partnership, Binance and FTX worked together to develop the cryptocurrency ecosystem further.
In addition to the equity investment into FTX, Binance also took a long-term position in the FTX Token (FTT) to help enable the sustainable growth of the FTX ecosystem, aligning with the broader scope of the partnership.
However, the relationship between the two platforms became estranged as the younger firm gained popularity.
The two executives – CZ and Sam Bankman-Fried, have exchanged words on social media for several months. However, the relationship between the two became further estranged on Sunday after Zhao revealed that his firm was selling its holding of FTT, the native token of FTX exchange that it had received as part of an exit from the firm last year.
In a tweet, Sam Bankman-Fried said: “A huge thank you to CZ, and all of our supporters. This is a user-centric development that benefits the entire industry. CZ has done, and will continue to do, an incredible job of building out the global crypto ecosystem and creating a freer economic world.”
The effect of the acquisition on the market is yet to be determined. However, some cryptocurrencies have improved following the announcement.
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