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Crypto platform Binance bails out rival FTX with merger

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Cryptocurrency exchange Binance has revealed plans to acquire rival FTX Trading.

The two exchanges’ owners, FTX’s Samuel Bankman-Fried and Binance’s Changpeng Zhao, announced the deal on Twitter but did not provide further details. Zhao said on Twitter that the deal is pending due diligence.

“FTX asked for our help this afternoon. There is a significant liquidity crisis,” Zhao said on Twitter. “To protect our users, we have acquired FTX in full and have signed a non-binding (agreement) that is intended to cover the liquidity crisis.”

The deal will make Binance, already the largest cryptocurrency exchange by daily trading volume, an even more dominant player in the cryptocurrency space. As of this week, FTX was the third largest exchange.

Watch | Bitcoin Plunges as Investors Flee Risky Assets:

Bitcoin, Other Cryptocurrencies Collapse As Investors Flee Risky Assets

Bitcoin and other cryptocurrencies are plummeting as interest rates rise and investors flee riskier assets. Binance, the world’s largest cryptocurrency trading platform, has also temporarily suspended cryptocurrency withdrawals.

FTX is the latest cryptocurrency company to come under financial pressure this year as the value of crypto assets such as Bitcoin and Ethereum collapsed. FTX said it plans to sell part of its own cryptocurrency known as FTX.

Many of the concerns about FTX were in the exposure to FTT. Bankman-Fried’s trading firm, Alameda Research, has been heavily exposed to FTT tokens, which were barely trading as of this weekend. On Tuesday morning, cryptocurrency investors said they were also having trouble withdrawing funds from FTX. After the deal was announced, FTT’s value plummeted overnight before stabilizing.

Other major cryptocurrencies also rose higher after the deal was announced, with Bitcoin gaining 5%.

Bankman-Fried, better known by his initials SBF, was the savior of the crypto industry earlier this year after pledging to buy certain crypto assets to bolster the balance sheets of other failed crypto companies. was considered. This included companies like his Voyager Digital, which went bankrupt after owning shares in the bankrupt stablecoin Terra.

Bankman-Fried also bought shares in online trading platform Robinhood. The company’s stock plummeted as earnings fell and it suffered losses.

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