Binance to Buy FTX in Megadeal of Crypto Exchanges

If the deal goes through, it will unite two of the largest crypto companies and cement the status of Binance’s founder, Changpeng Zhao, as one of the most powerful figures shaping the future of the loosely regulated technology.

The deal was announced as crypto markets, which have seen devastating losses this year, were on the brink of more panic. Reports had been circulating that FTX rested on shaky financial foundations. Many of its customers, who use FTX to buy and store their digital currencies, rushed to take their money out. On Monday night, the crypto research firm Nansen reported that more than half a billion dollars had flowed off the platform over the previous 24 hours.

At one point on Tuesday, FTX stopped processing withdrawals altogether, according to the Block, a crypto research firm. The exchange appeared to have entered a “liquidity crunch,” meaning it lacked the funds to fulfill demand for withdrawals.

“This afternoon, FTX asked for our help,” Mr. Zhao said on Twitter, describing how Binance had struck the deal to buy FTX. He said that his company was planning to “fully acquire FTX.com” to help relieve the pressure on the exchange, but added that the agreement was “nonbinding.”

Sam Bankman-Fried, chief executive of FTX, said on Twitter that the deal “benefits the entire industry” and would allow FTX to meet the surge of withdrawal requests.

Article source: https://www.nytimes.com/2022/11/08/technology/binance-ftx-deal-crypto.html