Cryptocurrency exchange Binance acquires rival exchange FTX. The latter turned out to be in financial trouble all of a sudden. These problems arose earlier this week, when banks traded FTX coins.
Sam Bankman Fred, CEO of FTX Confirms on Twitter That the company will already be taken over. FTX and Binance have entered into an acquisition agreement for an undisclosed amount. No other details about the acquisition were disclosed. However, Bankman-Fried’s CEO says the US subsidiary of FTX will not be taken over. Binance CEO Changpeng Zhao Say That the request for assistance came from FTX and that a non-binding letter of intent has now been prepared.
Rumors of a possible takeover swirled for several days after problems surfaced with FTX. This, along with Binance, is one of the largest places to trade cryptocurrency. The rumors started earlier this month. Coindesk news site Then the news broke FTX is found to be associated with Alameda Research, another major scholarship. The companies were not separated as expected, but Alameda used FTX’s FTT cryptocurrency to cover its own debt. As a result, FTX itself also turned out to have less liquid assets than expected. Binance CEO Zhang then decided to sell all of his FTX coins, causing banks to flock to FTX and FTT tokens. It lost almost all of its value in one go on Tuesday.
The acquisition leaves little to no serious competition in the cryptocurrency market. Binance is by far the biggest party out there. FTX was a strong competitor, but due to the acquisition, Binance has a huge position in the market and the rest is divided into small platforms only. The acquisition appears to have a direct impact on the prices of other cryptocurrencies; Bitcoin and Ethereum have lost a lot of value since Tuesday.
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