On Thursday, Binance, the world’s largest cryptocurrency exchange by volume, backed out of the deal to purchase its long-time rival and cryptocurrency exchange company, FTX.COM. Binance founder Changpeng Zhao pulled out of the merger that could have saved Sam Bankman-Fried owned FTX, barely 24 hours after announcing the deal. 

What’s more? 
Binance stating its reason for withdrawing from the deal stated that “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 FTX.com.” 

  • Binanace added that “our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.”

Why it matters 
Binance pulling out of the FTX acquisition and the overall impact on crypto assets re-emphasizes how volatile the industry is and the extent major events can create and diminish wealth. 

  • With little or no help to come for FTX, analysts say the company might head for bankruptcy and might take some struggling crypto projects along with it. 

The big picture 
The collapse of FTX would serve as a trigger to investors who are not comfortable with the operations of the exchanges they are invested in. So, the industry could see investors migrating to bigger and safer platforms like Binance. 

  • In the end, Binance, which is already the world’s biggest crypto exchange, could see a larger inflow of trade.
Leave a Reply

Your email address will not be published.