NEW DELHI: The biggest cryptocurrency exchange in the world, Binance, said on Thursday that it was pulling out of the acquisition of rival FTX after carefully after reviewing the firm's financial situation, which caused major cryptocurrencies to drop even more.
Tuesday saw the signing of a non-binding letter of intent by Binance to buy FTX for an unknown value.
The company announced in a tweet that it has decided not to pursue the potential acquisition of FTX owing to corporate due diligence, "as well as the newest press stories surrounding mishandled customer monies and purported US government investigations."
Retail consumers would suffer every time a significant company in an industry fails, said Binance. "We have observed that the crypto ecosystem is becoming more resilient over the last few years, and we believe that over time, outliers that misappropriate user funds will be eliminated by the free market," it said.
According to CoinDesk, Binance's top executives were concerned about FTX's loan agreements.
Another tweet from the business stated that while initially "our intention was to be able to support FTX's customers to provide liquidity, the challenges are beyond our control or ability to help."
Changpeng Zhao (CZ), the founder and CEO of Binance, stated earlier that FTX had requested their assistance. Coins continued to fall in value when Binance announced it was exiting a transaction.
Bitcoin has fallen to USD 15,800, its lowest level since November 2020, and was now trading more than 10% lower at USD 16,287. Ethereum, the second-largest cryptocurrency, also fell more than 10% to USD 1,166. The value of the global cryptocurrency market fell below USD 1 trillion.
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