Binance backing out would be yet another stunning development in Sam Bankman-crypto Fried’s empire’s implosion, which would add to the year’s worth of wild market happenings.
The world’s largest cryptocurrency exchange Binance is extremely unlikely to proceed with its proposed acquisition of struggling rival FTX after less than a day of reviewing the company, a source with knowledge of the situation told Coindesk..
The condition of Binance’s non-binding letter of intent for the acquisition, which was made public on Tuesday as FTX’s financial situation appeared to be spiraling out of control, was that Binance would do due diligence. An assessment of FTX’s internal data and loan agreements, which took about half a day, has caused Binance to firmly lean against consummating the purchase.
The corporate sibling of FTX, Alameda Research, has an excessive reliance on illiquid coins, including its own FTT, according to a story published by CoinDesk a week earlier.
The story raised doubts about the stability of Sam Bankman-crypto Fried’s empire, which includes both companies. The situation at FTX was made worse Sunday when Binance CEO Changpeng Zhao announced he would sell his holdings of the FTT cryptocurrency issued by FTX.
Binance then finalized the agreement after FTX requested assistance from and was denied by Coinbase and OKX, two major rivals, according to those familiar with the situation.