Sam Bankman-Fried’s crypto empire is in danger of collapsing as a result of Binance’s decision to abandon its acquisition of FTX, the business announced on Wednesday.
The decision to reverse course was made just one day after Binance CEO Changpeng Zhao revealed that the world’s largest cryptocurrency company had struck a non-binding agreement to acquire all of FTX’s international operations for an unknown sum, saving the company from a liquidity crisis.
So Near Yet So Far
In a tweet, Binance revealed that they had hoped to support FTX customers by providing liquidity, but the issues at FTX were out of their control or ability to help.
Binance CEO followed this up with a resigned tweet that confirmed the FTX takeover was not happening.
Sources with knowledge of the situation claim that on Monday night, Bankman-Fried was frantically trying to gather money from venture capitalists and other investors before he went to Binance due to a liquidity crisis.
Zhao initially consented to help, but his business swiftly changed its mind, citing accusations of “mishandled customer funds and alleged U.S. agency investigations.”
Crypto Twitter Reacts
Crypto Twitter had something to say about this latest development with some reveling in Sam Bankman-Fried’s pain.
Popular Crypto influencer Ben Armstrong laid it bare for FTX investors before piling on FTX and SBF.
What Next For FTX?
Who will purchase the troubled cryptocurrency exchange next is unknown. According to the Wall Street Journal, Bankman-Fried informed investors that the firm requires emergency funding as a result of a gap from withdrawal demands of up to $8 billion.
The collapse of the Binance-FTX agreement is the latest development in a dramatic implosion that has shaken the cryptocurrency community this week. Just on Monday, Bankman-Fried tried to reassure investors that the company’s assets were in good shape.
However, the selloff started after Binance’s Zhao announced in public that his company was selling its holdings in FTX’s native token FTT, and FTX was unable to stop the massive sell-off.
FTX Is Not Going Down Alone
FTX Trading Ltd., the company that owns the FTX exchange, had received investments from a number of prestigious firms, including BlackRock, the Ontario Teachers’ Pension Plan, SoftBank, Tiger Global, and Sequoia Capital. Tom Brady, a star NFL quarterback, and Gisele Bündchen, a supermodel, are both big investors in FTX as well.
Cryptocurrencies have fallen precipitously amid the deal turbulence, with bitcoin plummeting 15% on Wednesday after falling 13% on Tuesday. For the first time since November 2020, it is trading below $16,000. Ether, on the other hand, has dropped more than 30% in the last two days and is on the verge of going below $1,000.
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