Crypto exchange Binance, the largest in the world by volume, signed a letter of intent Tuesday to purchase its troubled competitor, FTX, in what appears to be a potential bailout of the latter amid a liquidity crunch. But after less than a day of due diligence, Binance appears highly unlikely to go forward with the deal, sources told Coindesk.
Specifically, FTX’s loan commitments raised concerns among Binance’s top brass, Coindesk reported. The report comes shortly after Binance’s chief executive, Changpeng Zhao, tweeted that FTX “going down is not good for anyone in the industry,” and the ongoing episode has “severely shaken” the confidence of consumers.
FTX, helmed by billionaire Sam Bankman-Fried, found itself in trouble this week after reports revealed that the exchange was unusually intertwined with its sister entity, Alameda Research, which held large amounts of the exchange’s native FTT token.
In the 72 hours leading up to Tuesday morning’s deal announcement from Binance and FTX, the latter exchange saw some $6 billion in withdrawals from its platform stoked by investor fears over its financial health. …
