FTX Accepts Binance Offer for Buyout for “Good of Users”

Binance and FTX have decided to bury the hatchet, but judging from the days of public squabbling between the two biggest offshore cryptocurrency exchanges, it seems that one is in a more favorable position. FTX, which has been suffering the financial pinch of the “crypto winter” has reached out to Binance for a buyout, which Binance CEO Changpeng Zhao has graciously accepted.

FTX in Need of Good, Loyal Friends

Subsequently, Sam Bankman-Fried, the man behind FTX and lauded as a “crypto savior” has toned down his disagreement with his counterpart. Zhao outlined what has transpired. “This afternoon, FTX asked for our help,” the executive said in a tweet:

There is a significant liquidity crunch. To protect users, we signed a non-binding letter of intent, intending to fully acquire FTX.com.

FTX.com CEO Sam Bankman-Fried

Bankman-Fried confirmed that Binance has agreed to buy out FTX in order to protect consumers. Moving forward, FTX should be fully acquired by Binance, effectively ending the rivalry between the two companies, and consolidating their operations under the same roof. However, Binance.US and FTX.US, which operate as regulated entities in the United States, will remain independent and be allowed to operate on their own.

Both Changpeng Zhao and Bankman-Fried are touted as two of the most powerful cryptocurrency visionaries, but not everyone is happy about the two companies coming together. To some, this means too much consolidation and a less-even playing field. Out of the major cryptocurrency exchanges, though, only Binance has shown remarkable resilience to the vicissitudes of crypto volatility.

Most of the rest of the companies out there, including Crypto.com, Coinbase and FTX seem to have fallen victim to the volatility and unchecked expansion. Revolut and Robinhood have also acknowledged a slowdown in profits and trading volumes, realizing that their all-in cryptocurrency bid was misplaced. Binance is a long-term partner of FTX, as it was among the first investors in the company.

Tit for Tat that Ends in Merger & Acquisition

However, on Sunday, Binance confirmed that it would be selling $2 billion worth of FTT crypto tokens, FTX’s proprietary cryptocurrency. This was supposedly prompted by an anonymous researcher going by the online moniker of “Dirty Bubble Media,” which alleged that one of Bankman-Fried’s companies, Alameda Research, has become insolvent.

“It’s almost as if SBF found a way to hack the financial system, printing billions of dollars out of thin air against which he was able to borrow massive sums from unknown counterparties,” the anonymous research contested in a post. However, the decision to sell FTT tokens prompted a response from FTX itself which withdrew its funds from Binance, heightening tensions between the two companies.

With FTX now reaching out to Binance once again, for the good of users as it were, the company has made a full circle returning where it started years ago.