Binance CEO Changpeng “CZ” Zhao said Tuesday the crypto powerhouse signed a deal to acquire rival FTX.
CZ said in a tweet that FTX “asked for our help,” adding that due to “a significant liquidity crunch,” Binance had signed a nonbinding letter of intent to acquire FTX “to protect users.”
FTX CEO Sam Bankman-Fried also said in a tweet that the company had “come to an agreement on a strategic transaction with Binance for FTX,” adding, “Things have come full circle.” Binance was an early strategic investor in FTX, but FTX bought out its stake last year, with Bankman-Fried suggesting the companies differed on regulatory issues.
The announcement follows a Twitter tit-for-tat between the two crypto giants over questions related to the finances of Alameda Research, the trading house started by Bankman-Fried. CZ announced that Binance was liquidating its holdings of FTX’s native FTT token, describing the move as “post-exit risk management, learning from” luna, a token Binance had backed that imploded earlier this year.
CZ also suggested a deeper rift between the two companies, adding, “We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs.”
Binance is crypto’s biggest exchange with a daily trading volume of roughly $31 billion, according to CoinMarketCap. FTX is third with about $3.5 billion daily trading volume.
FTX had appeared to halt withdrawals Tuesday before the announcement, according to on-chain analytics cited by some observers on Twitter. Bankman-Fried said the deal would allow withdrawals to resume.