Binance Backs Out of FTX Acquisition, Cites Crypto Exchange’s Balance Sheet and Pending US Investigations

Global crypto giant Binance says it’s decided not to acquire the embattled digital asset exchange FTX.

In a series of tweets, Binance lays out its reasoning for rapidly deciding not to pursue the deal.

“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.

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.

As regulatory frameworks are developed and as the industry continues to evolve toward greater decentralization, the ecosystem will grow stronger.”

The beleaguered exchange FTX is battling what it’s described as a “liquidity crunch” after facing a flood of speculation that the exchange is relying far too heavily on holdings denominated in its native asset FTX Token (FTT).

On Monday, Binance CEO Changpeng Zhao said his company had signed a non-binding agreement to acquire FTX, pending a full review of the company’s balance sheet.

According to a report from Bloomberg, both the US Securities Exchange Commission and the Commodity Futures Trading Commission (CFTC) are now looking into how FTX engaged with its trading firm Alameda Research as well as its US-based exchange platform FTX.US.

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The post Binance Backs Out of FTX Acquisition, Cites Crypto Exchange’s Balance Sheet and Pending US Investigations appeared first on BitcoinLinux.