Binance and FTX have always been each other's competitors. FTX is currently facing a liquidity crisis due to which the company is facing insolvency. And might go bankrupt.
Binance had expressed interest in acquiring its rival FTX and approving the deal at the worst possible time. Shockingly, after just 24 hours, Binance changed its mind and cancelled the deal very publicly with FTX stating regulatory issues. Changpeng Zhao the CEO of Binance had announced that they had signed a nonbinding deal with FTX while announcing the potential acquisition.
Many reports have been consistently showing that FTX had mishandled its investors' funds.
For the uninitiated, Binance is the largest online cryptocurrency exchange in the world. In addition to trading products, leveraged tokens, and derivative options, the Bahamian cryptocurrency exchange FTX also provides these services.
While speaking to the media, Binance stated that “In the beginning, we hoped to be able to support FTX’s customers to provide liquidity. But the issues are beyond our control to help.”
The year 2022 has not been good for cryptocurrency so far. First, there was a market value loss of over $2 trillion and now this never-ending dispute between Binance and FTX has shattered all the cryptocurrency investors. The Crypto world is on the edge of breaking. There was a glimmer of hope for FTX after Binance announced the takeover deal. But after the step-back, FTX is almost sure of filing for bankruptcy.
It seems several wallets allegedly belonging to FTX were drained of hundreds of millions of dollars in coins late on Friday night. A lot of the funds were transferred from Tether into stablecoin DAI, and from staked Ethereum into Ethereum. Soon after the drain, FTX stated in its official Telegram channel that it had been hacked, instructing users not to install any new upgrades and to delete all FTX apps.
FTX shareholders and their staff are under serious stress. Because digital assets in general are under so much pressure, FTX investors could lose more than $180 billion. Shivam Thakral the CEO of BuyUcoin which is India’s second-largest Crypto exchange quoted, “Investors are turning away from riskier assets as a result of Binance pulling out of the acquisition of FTX.
FTX's native token FTT had already suffered an 80% loss between Monday and Tuesday. Over $2 billion was lost in a day as the price dropped to $5. By reaching $2.30 on Wednesday, it had decreased, even more, bringing the market value of all the tokens in circulation down to about $308 million.
Sam Bankman- Fried, the CEO of FTX Trading Limited, has informed investors that FTX requires emergency funding as a result of the potential $8 billion shortfall resulting from withdrawal requests. Additionally, he stated that customers had requested $6 billion in withdrawals following the news.
Changpeng Zhao, CEO of Binance, dispels some of the doubts held by crypto enthusiasts as FTX struggles to meet its requirements. He had earlier said that "the founder of FTX did not master plan the collapse of FTX" on Wednesday. "FTX going down is not good for anyone in the industry," he continued. "Please don't regard it as Binance winning." Mr Zhao also cautioned against purchasing or selling FTT tokens.
Protecting shareholders is our top priority, FTX CEO Bankman- Fried has assured its investors during this challenging time. In the last two days, Mr Bankman has lost his billionaire status.
Now, every cryptocurrency investor is praying for a miracle to take place for the cryptocurrency market to stop bleeding and begin to recover.
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