Investing

Binance Implies FTX Misused Customer Funds and Walks Away from Deal

  • Binance announced late Wednesday it is dropping its offer to salvage FTX
  • According to the announcement, mishandling of user funds, and regulatory probes are some of the reasons for Binance’s decision.
  • Earlier on Wednesday, Binance’s CZ said that what is happening to FTX is not a win for his company, and is not a win for the wider crypto sector.
  • On Tuesday, Binance’s CZ announced SBF of FTX asked his company for help due to a liquidity crunch, and that they signed a non-binding acquisition LOI.
  • Reportedly, most of FTX’s legal and compliance staff quit en masse earlier this Wednesday.
  • Speculation on how likely the deal was to go through has been rampant since the moment the non-binding LOI was announced.
  • Users allegedly pulled over $6 billion from FTX in 72 hours
  • The FUD was started when Binance announced it was liquidating its FTT and compared the situation to LUNA
  • In direct response to the announcement Binance was liquidating its FTT, SBF tweeted FTX was “fine”. The tweet has since been deleted.
  • There have been multiple reports on Wednesday that both the CFTC and the SEC are investigating FTX, and FTX US. Neither regulator made an official comment.
  • The events surrounding FTX this week are making a profound impact on the crypto market. At the time of writing: BTC is down 14%, ETH is down 16%, Binance’s BNB is down 17%.
  • FTX’s FTT suffered the biggest decline. At the time of writing it is down to $2.43 from $22 on November 7th.

This article originally appeared on The Tokenist

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