Binance, the world's largest cryptocurrency exchange, is preparing a deal to buy FTX.com, its CEO Changpeng Zhao said Tuesday, following a prolonged slump of its rival's in-house coin and ongoing concerns over its financial health.
Zhao, who said via his verified Twitter account Sunday that he was liquidating Binance's holdings in FTT, the in-house token, citing "due to recent revelations that have come to light". The move triggered a big decline in both FTT and broader crypto markets, with Bitcoin slipping under the $20,000 mark and Ether testing the $1,500 level.
Sam Bankman-Fried, the owner of FTX, called the speculation "false", adding that the group's assets were "fine".
In a follow-up Tweet today, Zhao said he had signed a non-binding agreement to buy FTX.com, which comprises the non-U.S. business divisions of billionaire Bankman-Fried's broader group.
"This afternoon, FTX asked for our help. There is a significant liquidity crunch," Zhao said. "To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days."
Earlier this month, the crypto-focused news website CoinDesk reported that Alameda Research, another digital asset firm owned by Bankman-Fried, held most of its $14.6 billion in assets in the FTT coin, citing leaked company financials. Group CEO Caroline Ellison disputed the report, noting in a Tweet that "that specific balance sheet is for a subset of our corporate entities, we have > $10b of assets that aren’t reflected there."
Bitcoin prices were last seen 8.9% lower on the session at $18,762.60 each, while ether tokens were marked 12.5% lower at $1,372.98. Coinbase Global (COIN), the biggest listed exchange, was marked 11.28% lower at $50.80 each.
