A 48-hour drama ended today as Binance Holdings agreed to buy out its most important rival.
The sharp turn of events will reshape the more than $1 trillion industry amid potentially prolonged market pressure, Bloomberg points out.
The two sides made the announcement on Twitter at the same time. “To protect users, we have signed a non-binding LOI, intending to fully acquire FTX.com and help address the liquidity crisis,” Changpeng Zhao, CEO of Binance, said in a tweet. Terms were not disclosed.
“A huge thank you to CZ, Binance and all our supporters,” Bankman-Fried, CEO of FTX.com, said on Twitter. “Our teams are working to eliminate delays in withdrawals. This will clear up liquidity issues. All assets will be covered 1:1. This is one of the main reasons we asked Binance to come in.”
Bitcoin reacted bullishly by reaching $20,488. BNB, the token of the Binance blockchain, jumped 15%, erasing previous losses of up to 7.4%.
The tension between Bankman-Fried and Zhao dates back to almost from the beginning. In 2019, Binance invested in FTX, then a derivatives exchange. The following year, Binance released its own crypto derivatives and quickly became the leader in that space.
Tensions grew as the two companies were increasingly seen as different by regulators. Bankman-Fried was testifying to Congress, while Binance, which was said to be facing investigations from regulators around the world, stressed that it was not based anywhere.
The drama came to a head on Sunday when Zhao announced that he would sell all holdings of FTT, the FTX token, worth $529 million at the time due to “recent revelations that have come to light”.
The tweet followed a story from CoinDesk that said Alameda Research, a trading house owned by Bankman-Fried, had many of its assets in FTT tokens. The latter reversed an earlier loss of more than 35% to about 19%, and was recently trading at about $18, according to CoinMarketCap.
Binance is by far the largest crypto exchange with a trading volume of around $31 billion so far today. FTX is second in spot transactions, with a volume of about $3.7 billion, according to CoinMarketCap data.
CoinMarketCap is owned by Binance.
