Binance’s Chao Zhengpeng and FTX’s Sam Bankman-Fried.
Horacio Villalobos/CorbisAlex Wong/Getty Images
Binance is highly unlikely to move forward with its proposed buyout of FTX, Coindesk reported Wednesday.
Binance reconsidering the rescue deal after reviewing FTX’s internal data and loan commitments, the report said.
Binance CEO Changpeng Zhao said Tuesday FTX asked for help amid a “significant liquidity crunch”.
Binanceis highly unlikely to move forward with its proposed acquisition of rival FTX less than a day after it said it would step in and rescue the failed exchange amid solvency worries Coindesk reported Wednesday.
Binance was strongly leaning against completing the emergency deal after reviewing FTX’s internal data and loan commitments, the report said, citing a person familiar with the matter.
Changpeng Zhao, Binance’s CEO and co-founder, said Tuesday FTX asked his company for help amid a “significant liquidity crunch”. Binance was performing its due diligence on FTX under a non-binding letter of intent for the purchase, a move taking place less than a year after FTX carried a $32 billion valuation.
FTX before striking a deal with Binance had sought help from other large exchanges Coinbase and OKX but it was turned down, according to the Coindesk report.
Cryptocurrency investors are closely watching developments surrounding FTX, the digital assets empire run by Sam Bankman-Fried that’s split into FTX, the cryptocurrency exchange, and Alameda Research, a crypto trading firm.
Contagion fears began cropping up last week following reports of heavy exposure to FTX’s native token, FTT, on Alameda’s balance sheet.
FTT on Wednesday plunged 79% to $3.81