Binance has scrapped its letter of intent to buy rival crypto exchange FTX, sending the price of Bitcoin into a freefall.
The cryptocurrency dropped as much as 14 per cent, within minutes of the Binance-FTX news being revealed.
A spokesperson for Binance said in a statement: “As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com.”
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) November 9, 2022
FTX had been struggling with a surge in withdrawals that caused a “liquidity crunch”.
Concerns about FTX’s financial health reportedly triggered $6 billion worth of withdrawals in just three days.
This pressure came about due to Binance CEO Changpeng Zhao tweeting that Binance would sell its holdings of FTX’s digital token, known as FTT.
The token has lost over 70 per cent of its value since the start of the week.
FTX has also warned users not to withdraw monies at this stage, and are recommending people not make deposits.
