Adedapo Adesanya
By Adedapo Adesanya
Binance has revealed that it has signed a letter of intent to acquire FTX, delivering a surprising twist following a public beef between the world’s two largest crypto exchanges.
The firms didn’t disclose the value of the deal, which is non-binding and pending the due diligence process.
The deal follows Binance founder, Mr Changpeng Zhao and FTX founder, Mr Sam Bankman-Fried’s months-long clash on social media, which escalated earlier this week and contributed to several digital tokens taking a tumble Tuesday.
Tuesday’s announcement shocked the business world and even the crypto community, which has grown accustomed to topsy-turvy developments this year.
FTX Ventures, the venture arm of the crypto exchange, is also a major investor in a large number of crypto startups.
Mr Zhao said Binance reached the decision after FTX asked the firm for help.
“To protect users, we signed a non-binding LOI, intending to fully acquire FTX and help cover the liquidity crunch. We will be conducting a full DD in the coming days,” he said.
Binance, the world’s largest exchange, was the first investor that backed FTX, but as the younger firm grew in popularity, the relationship between the two firms started to tilt towards enmity.
The relationship between the two hit an all-time low earlier this week after Mr Zhao revealed that Binance was selling its holding of FTT, the native token of FTX exchange that it had received as part of an exit from the firm last year.
Mr Zhao said the firm was liquidating its FTT holdings as a “post-exit risk management,” giving some credence to a widely-circulated rumour about Alameda Research’s financial health, one of FTX’s many owned companies.
