Binance is set to buy rival cryptocurrency exchange FTX after a liquidity crunch at the company run by billionaire Sam Bankman-Fried left it facing increased withdrawals and slumps. financial difficulties.
“This afternoon, FTX asked for our help,” Binance CEO Changpeng Zhao tweeted. “There is a major liquidity crisis. To protect users, we have signed a non-binding agreement [letter of intent]with the intention of fully acquiring FTX.com.”
The announcement comes after a testing period for FTX, whose FTT token plunged 30% on Tuesday. Over the weekend, Binance said it intended to offload its token holdings, sparking a wave of anxiety over FTX’s financial health.
“We have reached an agreement on a strategic transaction with Binance,” Bankman-Fried said in a tweet on Tuesday, adding, “CZ has done, and will continue to do, an incredible job of building the global crypto ecosystem, and creating a freer economic world.
FTX has confirmed the deal. The two companies did not immediately disclose the terms.