Breaking: Binance to acquire FTX
The headline says it all.
Stunningly, the world’s largest cryptocurrency exchange, Binance, is set to acquire the world’s second largest cryptocurrency exchange, FTX.
While details are scarce right now and I will update the story in due time on Invezz as details become clear, the madness kicked off on Tuesday afternoon as FTX sent the market into disarray by suspending withdrawals.
I spent yesterday crafting a deep dive into the mess, assessing whether FTX were good for it. I concluded that while they are highly unlikely to be insolvent, the whole debacle is good for nobody. Ironically, it could all have been solved by throwing proof of reserves on-chain in some sort of public wallet.
As the market pummelled FTX’s native token, FTT, into submission, worry started to grow. And then came withdrawals suspended. For a couple of hours, there was radio silence from FTX honcho Sam Bankman-Fried.
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And then, the bombshell.
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Binance CEO Changpeng Zhao (CZ) dropped the mic and simply went out to acquire his largest competitor.
Of course, it is all subject to due diligence, but assuming it goes through, this is a stunning development. The fall from grace for SBF is stark, in this battle of the billionaires with abbreviated nicknames.
BNB was already the only token to resist the wave of selling today, and as I write this in the minutes after the announcement, is jumping further up.
Meanwhile, for FTX customers sweating over withdrawals, they appear to have been saved.
Like I said, details remain unclear right now, but we will be publishing a deep dive into the whole debacle shortly. If there is one thing crypto loves, it’s a liquidity crunch.