Binance CEO Changpeng “CZ” Zhao tweeted that FTX “asked for our help,” adding: “There is a significant liquidity crunch.” Binance signed a letter of intent to buy FTX, but said it had “the discretion to exit the deal at any time.” FTX hit a $32 billion valuation earlier this year, with blue-chip investors including BlackRock, Canada’s Ontario Teachers’ Pension Plan and SoftBank backing the company. The Binance deal ends an explosive and very public feud between Bankman-Fried and Zhao – two of the most powerful figures in the cryptocurrency industry – and will combine two of the world’s largest crypto exchanges. FTX’s woes accelerated over the weekend when Binance said it intended to offload its holdings in FTX token FTT, citing concerns about the exchange’s financial stability and sending the token tumbling in price. Bankman-Fried responded Monday, saying “a competitor is trying to go after us with false rumors.” He added that he would “love it” if he could work with Zhao “together for the ecosystem.” The head of FTX also tried to calm the markets saying: “FTX is fine. The assets are good.” But on Tuesday, he tweeted: “CZ has done, and will continue to do, an incredible job building the global crypto ecosystem and creating a freer financial world.” FTX confirmed the deal. the two companies did not immediately disclose terms. If completed, the deal will leave Binance as the largest platform in crypto trading. “This establishes Zhao as the most powerful player in crypto,” said Ilan Solot, co-head of digital at Marex Solutions. “Zhao’s view of the world will matter much more in terms of how he wants to interact with regulators and policymakers. . . the weight of his opinions will be much stronger.” The crypto industry has struggled over the past year, particularly after the terra and luna tokens failed in May. The price of the iconic tokens bitcoin and ether have fallen and several major companies have collapsed, including lender Celsius Network and hedge fund Three Arrows Capital. Recommended The bailout deal is also a major setback for Bankman-Fried, who has long been seen as a relatively stable and ambitious figure in the often volatile world of crypto. In the wake of this year’s crypto market crash, he gained a reputation as the savior of the industry after helping failing companies. In June, the head of FTX announced a $250 million loan to troubled crypto lender BlockFi. The loan followed further help for crypto broker Voyager Digital, which was bailed out with an FTX loan worth about $485 million in cash and bitcoin. But Bankman-Fried’s ambitions extended to traditional markets as well: his exchange sought to shake up Wall Street’s futures and stock markets by buying a stake in Robinhood, the retail broker. In 2021, FTX signed a 19-year deal to rename Miami Heat Arena as FTX Arena. In 2021, Bankman-Fried said a Goldman Sachs purchase is “not out of the question at all.”
