Binance backs out of deal to buy FTX • TechCrunch

The world’s largest cryptocurrency exchange by volume, Binance, said it would walk away from a deal with the third-largest cryptocurrency exchange by volume, FTX.

On Tuesday, Binance signed a letter of intent to buy its troubled competitor, FTX, in what appeared to be a possible rescue of the latter amid a liquidity crisis. But just a little over 24 hours later, that plan fell apart.

Binance pulled out after reviewing the firm’s structure and books, it said in a statement to the Wall Street Journal. “Our hope was to be able to help FTX clients provide liquidity, but the issues are beyond our control or ability to help,” Binance said.

“As a result of corporate due diligence, as well as recent news reports of mishandling of customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of [FTX]Binance he said in a tweet.

“Anytime a major player in an industry fails, retail consumers will suffer,” Binance continued. “We have seen in recent years that the crypto ecosystem is becoming more resilient and we believe that over time outliers that misuse user funds will be weeded out by the free market.”

Binance and FTX did not immediately respond to requests for comment from TechCrunch.

Earlier today, sources familiar with the matter told CoinDesk that FTX’s loan commitments raised concerns among higher-ups at Binance. The report follows Binance CEO Changpeng Zhao tweeting that FTX “going down is not good for anyone in the industry.”

This is a developing story and may be updated if new information emerges.

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