Binance agrees to acquire FTX following liquidity crunch

Binance, the world’s largest cryptocurrency exchange, has agreed to acquire rival exchange FTX, Sam Bankman-Fried, founder and chief executive of FTX announced on Tuesday. 

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Fast facts

• Binance CEO Changpeng Zhao also confirmed the news on Tuesday and vowed to support FTX’s liquidity crunch.
• Both Zhao and Bankman-Fried said that working out the details of the deal will take time, but the Binance founder added that his exchange can “pull out from the deal at any time.”
• The development follows reports of liquidity and withdrawal issues at FTX, as Binance liquidated its remaining FTX tokens (FTT) on Sunday. 

• A CoinDesk report that reviewed a financial report from Alameda Research, a sister company of FTX, found that the company’s debt accounted for 54% of its assets as of June 30, with a majority holding of FTT, suggesting solvency issues. 

• FTT lost 39% of its value within an hour to trade at US$9.84 at 02:10 am in Hong Kong according to CoinGecko data.
• BNB fell 9% to trade at US$338.15 after spiking to US$393.93 shortly after the announcement. 

See related article: Binance to sell FTX token holdings amid questions over trading arm Alameda finances