Previously thought to be one of the most stable companies in the sector, crypto exchange FTX is now looking for a buyout it seems.
Competitor Binance signed a Letter of Intent (LOI) on Tuesday to make this a reality, with the company agreeing to buy out FTX in principle.
This follows FTX’s decision to temporarily pause withdrawals, causing further pain to cryptocurrency market.
While tension between FTX founder Sam Bankman-Fried and Binance founder Changpeng Zhao has been growing over social media, Binance has agreed to sign a non-binding LOI to ensure that users are protected. “We will be conducting a full DD in the coming days”, Zhao said. “Binance has the discretion to pull out from the deal at any time”, he added.
Bankman-Fried welcomed the move in a public rapprochement with his homologue and said that the important thing was that consumers were protected.
FTX has been keen to challenge Binance as the dominant force in the cryptocurrency sector over recent years, something that Binance has not liked much.
Regardless, the current tribulations in FTX mean that Binance will retain its leadership position.
However, for FTX to move past, it would need to shed some assets, including Alameda, which ought to be shut down, according to Bernstein, a research firm, in an investor note on Tuesday.
“Binance is the immediate trigger, but FTX should resolve its relationship with Alameda. FTX cannot carry on its existing ownership structure with Alameda”, the firm said.
Bankman-Fried offered his praise to Zhao, hailing his contributions to the global cryptocurrency system and welcoming his role in creating a “freer economic world”. FTX, though, remains out of some important markets, such as the UK.
FTX’s own role in saving the cryptocurrency sector has hit a wall it seems, after Bankman-Fried’s own firm went on buying out a number of beleaguered crypto companies in which it saw value. However, this buy outs have added to FTX’s instability it seems now.
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