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Thursday, December 1, 2022

Crypto exchanges: Binance calls off takeover of struggling rival FTX

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Jane
Jane
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
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First yes, then no: the crypto giant Binance does not want to swallow its competitor FTX after all. The reason is probably the marketplace’s own problems – it should also be about investigations by US authorities.

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The takeover of the ailing crypto exchange FTX.com by the competitor Binance has failed.

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“We have decided that we will not pursue the potential acquisition any further,” Binance – the world’s largest marketplace for digital currencies such as Bitcoin – said on Twitter on Wednesday. Reason are, among other things, media reports on misconduct in handling customer funds and alleged investigations by US authorities. After enormous withdrawals of funds, FTX had run into acute liquidity problems.

The companies had actually announced on Tuesday that Binance wanted to take over most of FTX’s business. However, it was initially only a non-binding declaration of intent, as Binance boss Changpeng Zhao immediately emphasized. After the start of the audit, Binance quickly distanced itself from the takeover plan. Zhao plays an obscure role in the back-and-forth. On Sunday, he himself had reinforced doubts about FTX’s cash reserves with a tweet and fueled the flight of customers there.

Zhao and Bankman-Fried were once very close

Zhao and FTX boss Sam Bankman-Fried were once closely connected as pioneers in the industry and partners, but then developed into arch-rivals with their crypto exchanges and recently fell out over regulatory issues. Bankman-Fried became more and more the mouthpiece of the crypto scene and tried to lobby politicians and supervisors, which Zhao didn’t like. Bankman-Fried now stands before the ruins of his FTX corporation. A few months ago, the 30-year-old was still considered a child prodigy and a beacon of hope in the crypto industry, who is helping financially weak companies.

How things will continue for FTX customers is unclear. Bankman-Fried assured Tuesday that all deposits are protected and will be paid in full. But that seems increasingly uncertain. Until the situation escalated, Bankman-Fried had also maintained that there was nothing to worry about and dismissed rumors of a shortage of money as false. Meanwhile, the trading platform’s imbalance is shaking the crypto market. Bitcoin price fell below $16,000 on Wednesday. Before the first reports of problems at FTX, it was well above $20,000.

Source: Stern

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