Binance Implies FTX Misused Customer Funds and Walks Away from Deal

  • Binance announced late Wednesday it is dropping its offer to salvage FTX
  • According to the announcement, mishandling of user funds, and regulatory probes are some of the reasons for Binance’s decision.
  • Earlier on Wednesday, Binance’s CZ said that what is happening to FTX is not a win for his company, and is not a win for the wider crypto sector.
  • On Tuesday, Binance’s CZ announced SBF of FTX asked his company for help due to a liquidity crunch, and that they signed a non-binding acquisition LOI.
  • Reportedly, most of FTX’s legal and compliance staff quit en masse earlier this Wednesday.
  • Speculation on how likely the deal was to go through has been rampant since the moment the non-binding LOI was announced.
  • Users allegedly pulled over $6 billion from FTX in 72 hours
  • The FUD was started when Binance announced it was liquidating its FTT and compared the situation to LUNA
  • In direct response to the announcement Binance was liquidating its FTT, SBF tweeted FTX was “fine”. The tweet has since been deleted.
  • There have been multiple reports on Wednesday that both the CFTC and the SEC are investigating FTX, and FTX US. Neither regulator made an official comment.
  • The events surrounding FTX this week are making a profound impact on the crypto market. At the time of writing: BTC is down 14%, ETH is down 16%, Binance’s BNB is down 17%.
  • FTX’s FTT suffered the biggest decline. At the time of writing it is down to $2.43 from $22 on November 7th.

As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of

— Binance (@binance) November 9, 2022

This article originally appeared on The Tokenist

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