FTX CEO Sam Bankman-Fried called the news a “user-centric development that benefits the entire industry.”
Following Binance CEO Changpeng Zhao’s announcement that the company would liquidate its position in FTX Token (FTT), FTX CEO Sam Bankman-Fried, also known as 'SBF,' took to social media seemingly in an effort to quell rumors of conflict between the major crypto exchanges.
According to a Nov. 8 Twitter thread from Bankman-Fried, FTX has “come to an agreement on a strategic transaction” with Binance following attempts to clear out its withdrawal backlog. SBF said he had asked Binance to step in, aiming to “clear out liquidity crunches” and cover assets on a 1:1 basis.
“I know that there have been rumors in media of conflict between our two exchanges, however Binance has shown time and again that they are committed to a more decentralized global economy while working to improve industry relations with regulators,” said SBF. “We are in the best of hands.”
Zhao issued his own statement on Twitter, saying FTX approached Binance for help on Nov. 8 in response to a “significant liquidity crunch.” According to the Binance CEO, the transaction to which SBF referred was a non-binding letter of intent for the major exchange to acquire FTX. Zhao added that Binance was "assessing the situation in real time" and had the ability "to pull out from the deal at any time."
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 https://t.co/BGtFlCmLXB and help cover the liquidity crunch. We will be conducting a full DD in the coming days.
— CZ Binance (@cz_binance) November 8, 2022
The announcement of the tentative deal between two major exchanges came just one day after SBF claimed on Twitter that FTX and its assets were "fine" and dismissed reports of liquidity issues as "false rumors." The FTX CEO also called on CZ to have the exchanges work together "for the ecosystem," but some of the Binance CEO's social media responses suggested he may not have been supportive of the deal — Zhao hinted Binance would "stay in the free market" as opposed to having Alameda Research purchase the exchange's FTT holdings.
Related: FTX Token price risks 30% plunge as a 23M FTT ‘part’ moves to Binance
Should the deal between FTX and Binance move forward, it would potentially represent a landmark acquisition in the crypto space, rivaling reports Coinbase planned to purchase BtcTurk for $3.2 billion. FTX has often been the one scooping up businesses associated with digital assets, aiming to purchase Bitvo as part of its move into Canadian market and reportedly raising $1 billion to explore additional acquisitions.
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