Cryptocurrencies have been devastated this year as investors retreated from riskier assets amid rising interest rates.
Crypto giant Binance signed a non-binding agreement to buy rival FTX from a non-US unit, FTX.com, covering a “water crunch” in the cryptocurrency exchange, techs announced on Tuesday. company. The surprise move raised new concerns about the risks investors face in volatile crypto markets.
Binance CEO Changpeng Zhao said in a tweet that FTX, led by billionaire Sam Bankman-Fried, asked for our help after a “severe financial crisis”. Zhao said that Binance, the world’s largest crypto exchange, will be active in the coming days as the next step to acquire FTX.com. Related: Ukraine War: ‘I Will Break My Arm, My Leg… Anything to Avoid the Draft’
In a separate tweet, Bankman-Fried said that the US operations of Binance and FTX were not part of the agreement. “It is an open secret for the time being that FTX and Binance are in existential competition; the only surprise today is that things are escalating quickly to an obvious conclusion,” said Joseph Edwards, a senior consultant. investing in Securitize Capital “This decision is appropriate. to provide relief to consumers in the short term, but creates questions in the long term.”
The deal is the latest emergency bailout in the cryptocurrency world this year as investors back away from riskier assets amid rising interest rates. The cryptocurrency market has fallen by about two-thirds since its peak – to $1.07 trillion.
It also marks a major economic turnaround for Bankman-Fried, which positioned itself as the company’s savior by bailing out troubled rivals earlier in the year. “The issue of liquidity continues to affect the crypto market,” said Dan Raju, CEO of Tradier, a brokerage and financial services provider. “It is scary to think that FTX, which is one of the largest crypto exchanges in the world, has been bitten by the financial crisis and Binance, their biggest rival, is coming to their rescue. They will do adultery.
FTX has seen about $ 6 billion in withdrawals in the 72 hours to Tuesday morning, according to a message sent by Bankman-Fried officials, seen by the Reuters news agency. 카지노사이트
“On an average day, we have tens of millions of dollars in net inflows/outflows. Things have been average until this weekend a few days ago, “Bankman-Fried wrote in a message to employees sent on Tuesday morning. “In the last 72 hours, we have received about $ 6 billion in withdrawals net and FTX.”
Outages on FTX.com are “suspended for good”, he wrote, adding that this will be resolved “in the near future”. FTX did not immediately respond to a request for comment about the employees’ information.
The Problem of Crypto Tycoons
Two of the most powerful investors in the crypto industry, Zhao and Bankman-Fried have had a rocky relationship. At the end of 2019, Binance invested in FTX, then the exchange was small, before withdrawing money in July last year. By then, FTX has become a growing rival to Binance, which dominates the crypto industry with more than 120 million users. The dispute between Zhao and Bankman-Fried has surfaced in recent days, with a public spat on Twitter.
“A competitor is trying to sue us with false rumors,” FTX’s Bankman-Fried tweeted on Monday, a day after Zhao announced that Binance would sell its FTX token, without providing further details. He also tagged Zhao in a later tweet, saying “I would love @cz_binance if we can work together for the ecosystem.” Morrison is Hoping for an Unexpected Result in the Election, but ‘uncommitted’ Voters Seldom Change Their Minds in the Last Week
“Good Reasons to Worry”
The deal comes after crypto exchange token FTX crashed, losing a third of its value and dragging down other major digital assets, amid talk of pressure on FTX’s currency.
Binance is currently being investigated by the United States Department of Justice for possible financial violations, Reuters reported last week. A spokesman for the US Commodity Futures Trading Commission said the agency is investigating the situation.
News of the deal sent the cryptocurrency soaring, but those gains were quickly erased. FTX tokens last traded at $5.33, down more than threefold on Tuesday.
Bitcoin, the biggest digital token, fell 11%.