Binance CEO Changpeng Zhao is prematurely pulling out of the FTX deal, leaving a troubled Sam Bankman-Fried more than unsatisfied.
In a tweet earlier this week following the uncovering of Alameda’s hefty FTT reliance, Zhao stated “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.”
After having undergone said “DD”, Binance has come to the conclusion that FTX just isn’t for them.
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of http://FTX.com,” Binance announced in a Twitter thread.
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com.”
“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help. Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.”
In a note to staff, CZ stated “we did not master plan this or anything related to it” adding that “it was less than 24 hours ago that SBF called [him]. And before that [he] had very little knowledge of the internal state of things at FTX.”
He further warned his Binancians “DO NOT trade FTT tokens…. DO NOT buy or sell.”
Following the announcement that Binance is pulling out of the deal, CZ simply tweeted, “Sad day. Tried, but 😭.”
Hate to say we told you so
Yes, we’re going there. In an article published by Blockhead yesterday, we highlighted concerns about whether CZ would proceed with the acquisition, alluding that the CEO would unlikely fulfill it:
“Ok, hear me out… EXIT ALL THE MARKETS,” one Twitter user loudly exclaimed, garnering over 13,000 likes with responders all declaring their shorting positions.
Skeptics also shared concern that CZ purchasing FTX doesn’t make sense, and could ultmately U-turn on the deal. “Prediction : This transaction won’t close and Binance will walk away after their fake “due diligence”. That tweet is the actually the knife in the back of Sam Bankman,” writes crypto Twitter personality Wall Street Silver, quote tweeting CZ’s original tweet.
Read more: “Exit All Markets”: Crypto Industry Panics as Binance Announces FTX Acquisition
Dylan LeClair, who never shies away from offering a skeptical view on the space, weighed in saying, “Similarly, expecting CZ to come in with billions of cash purely to make users whole does not make sense from a business perspective. I’d be happy to be wrong here. Hoping for the best for all users involved.”
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