- SBF breaks silence on FTX being acquired by Binance.
- The financial terms of the transaction have not been determined.
- Zhao signed a non-binding LOI to fully acquire FTX and help cover the liquidity crunch.
Sam Bankman-Fried, the CEO of FTX, has broken the silence by talking about the recent acquisition of the company by rival Binance. Apparently, all was not well for FTX in terms of liquidity which made Bankman-Fried seek help from Changpeng Zhao, the CEO of Binance, who was one of the first investors in FTX.
Bankman-Fried made the official announcement giving the details to his followers:
Additionally, the FTX founder said that the deal will help them ease out the liquidity crunch along with protecting the customers. He further extended his gratitude to Zhao and Binance for stepping in to pledge support for a more decentralized global economy while seeking to enhance and regulate connections between business and the government.
Interestingly, Zhao on Monday announced that they would his company would liquidate all of its FTT token holdings as part of a post-exit risk management plan. After learning that FTX’s balance sheet mainly consists of FTT tokens rather than independent assets like fiat money or another crypto.
However, Zhao stood up for FTX without second thoughts in an attempt to protect the users. As such, Zhao signed a non-binding Letter of Intent (LO)I to acquire the crypto exchange. The financial terms of the deal have not been determined yet.
Zhao yesterday wrote on his social platform:
This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days
The recent events have not worked well for the prices of FTX and its native token FTT. FTX saw an 83% decline in net crypto asset holdings, which added to a 93% decrease in the company’s stablecoin reserve during the previous two weeks and brought associated withdrawals to almost zero.
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