Binance drops FTX rescue deal

Binance drops FTX rescue deal

FTX CEO Sam Bankman Fried He told employees that he is exploring all options for the failed crypto exchange.

This comes after cryptocurrency prices plunged this week after crypto exchange Binance confirmed its withdrawal from its deal to buy FTX trading.

The collapse of Binance’s rescue of FTX trading led to Bitcoin sinking to its lowest level in two years.

FTX Rescue Collapse

The price of Bitcoin fell more than 13 percent to $15,840, according to CoinDesk, its lowest level since November 2020. It was above $20,000 earlier in the week.

The other major cryptocurrency, Ethereum, is down 13 percent.

according to The Guardian newspaperA non-binding rescue deal was agreed by the CEOs of the two crypto exchanges, but was subject to Binance conducting due diligence on FTX’s balance sheet.

After an initial review, Binance said in a statement on Wednesday that it had significant concerns that convinced it to back out of the deal.

“Initially, our hope was to be able to support FTX clients to provide liquidity, but the issues are beyond our control or our ability to help,” Binance was quoted as saying in a statement.

The Guardian reports that FTX has agreed to sell itself to Binance after trying the equivalent cryptocurrency for the operation of the bank.

Reportedly, clients fled the exchange after becoming concerned about whether FTX had enough capital.

FTX’s crypto token, otherwise known as FTT, has fallen more than 50 percent in reports. The token, now worth about $2.69, was worth 10 times that amount just a week ago.
https://coinmarketcap.com/currencies/ftx-token/

Investors’ concerns appear to have centered on whether the balance sheet of an FTX subsidiary known as Alameda Research is saturated with increasingly worthless FTT tokens, whose total value will not exceed the exchange’s obligations, effectively rendering FTX insolvent.

Bloomberg News and other media have reported that FTX is now under investigation by US authorities over how it handles customer deposits.

Explore optinos

Meanwhile, FTX CEO Sam Bankman-Fried told employees that he is considering all options available to the exchange.

“I am working, as quickly as possible, on the next steps here. I wish I could give you more clarity than I can,” Bankman-Fried said in a letter to FTX staff. Seen by Reuters.

Bankman-Fried said in the employee email that his goals were to protect customers and provide any possible assistance to employees and investors.

“I will continue to fight for those (goals), as best I can, as long as it is convenient for me. I am exploring all options.”

He reportedly wrote, “I am deeply sorry we have come to this place, and for my part in it.” “That’s on me, and I’m on my own, and that’s bad, and I’m sorry, not because that makes it better.”

In a subsequent message to staff, seen by Reuters and sent around 6 p.m. ET (2300 GMT Wednesday), Bankman-Fried said: “I’ll post more updates tonight, I promise.”

Huge responsibility?

while As reported by Reuters (Quoting a senior OKX executive) that Sam Bankman-Fried appealed on Monday for a $2 billion to $4 billion cash injection from OKX, before announcing the now-collapsed acquisition discussed by arch rival Binance.

The CEO of the troubled exchange allegedly offered “a lot of urgency” in seeking this amount of cash during a call on November 8, as this would have helped FTX survive a short-term liquidity crunch, Lennix Lai, director of financial markets at OKX quoted Reuters as saying.

Citing a Bankman-Fried comment he made on the call, Lay said the call for cash came as FTX faces a total commitment of $7 billion.

FTX is the latest cryptocurrency company to come under financial pressure this year The value of crypto assets collapsed during 2022.

Another notable failure was collapse From Cryptocurrency Lender Celsius Networkwhich in July Celsius Filed for Chapter 11 (bankruptcy) proceedings. in the United States.

Cryptocurrency investors have been wary since collapse subordinate TerraUSD “stablecoin” in early Maywhich has been linked along with the Luna coin to a similar high-yield system.

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