Crypto Exchange Binance To Buy Struggling Rival FTX | CNN Business

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In an unexpected twist, cryptocurrency exchange Binance said it was buying rival FTX after the company faced a liquidity crunch.

“This afternoon, FTX asked for our help,” Zhao “CZ” Changpeng tweeted on Tuesday. “There is a major liquidity crisis. To protect users, we have signed a non-binding agreement [letter of intent] intends to fully acquire and help cover the cash shortage.

The deal comes after a public clash between the two companies’ chiefs that fueled a large sell-off in cryptocurrencies earlier on Tuesday.

FTX founder Sam Bankman-Fried is one of the most influential figures in the crypto space and has become something of a one-man bank over the summer, shelling out around $1 billion to back crypto businesses. struggling crypto as crypto prices plummet.

On Tuesday, however, the tables were turned as Bankman-Fried’s company faced a run on its internal token, FTT.

“I’m really shocked by this,” an industry executive told CNN Business. “FTX to fail…would be kind of like a Lehman Brothers event for space. But if they were successfully bailed out, that would probably prevent things at the pass.

Binance and FTX did not immediately provide details on the deal and noted that both parties are finding out in real time.

“There is a lot to cover and it will take time,” Zhao tweeted. “This is a very dynamic situation, and … Binance has the discretion to withdraw from the agreement at any time.”

The pressure on FTX began to mount over the weekend when Zhao, the head of Binance, declared that his company would sell all of its holdings – approximately $580 million – in FTT.

“Due to recent revelations that have [come] in light, we have decided to liquidate any FTT remaining on our books,” he tweeted

This story is growing and will be updated.

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